Hurricane Isaac is barreling towards the Gulf Coast, forcing many businesses and homeowners to check their insurance plans.
Of course, the best time to prepare for hurricanes is before they are headed your way, but it's never too late to plan. Here are answers to some commonly asked hurricane-insurance questions, answers that can help you prepare for the storm:
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I live in an area that has lots of hurricanes -- should I buy extra insurance?
“It's more important to know what coverage you have before looking at adding more insurance.” notes Mike McCartin an independent insurance agent with Joseph W. McCartin Insurance in College Park, Maryland. Examine your plan and see if a “named storm deductible” is included. Is wind damage included? In Florida, for example, you must purchase a separate policy for wind coverage. Florida averages about 2-3 hurricanes per year.
Other than flood coverage, you would not need extra coverage in states that allow insurance companies to include wind damage in the typical homeowners policy.
“Talk to your agent about your state's regulations." says McCartin.
Is flood damage covered by my homeowner’s policy?
To be protected from flooding, you need a separate flood insurance policy. And make sure you have enough coverage. If the cost to replace your dwelling is more than the federal flood insurance limit, you should consider purchasing an excess flood policy.
Make sure you review the dwelling-replacement cost annually with your agent and be sure you have enough coverage to rebuild in the event of a total loss.
Can I change my plan a couple of days before a hurricane hits?
Once a warning or watch has been issued, you generally cannot change your policy. Also, flood policies have a 30-day waiting period before they become effective.
What about coverage for my business?
As a general rule, homeowner policies are pretty comprehensive in terms of the coverage provided. It is more an issue of having enough coverage to rebuild -- being aware of deductibles -- and understanding that flood insurance is excluded and must be purchased separately.
For business owners, deductibles and exclusions are similar, but it is very important that you understand that the policy will not pay more than the building or contents limit purchased. In fact, there may even be penalties for not purchasing enough coverage.
Also make sure you have purchased loss-of-business-income coverage. This important coverage will help to minimize a financial loss if your business is closed for an extended period of time due to a covered loss.