Wild fires and tornadoes are typically covered by a standard policy. But flooding from hurricane-induced storm surges? Not so much.
As residents of Louisiana begin to assess the damage wrought by Hurricane Laura, some homeowners may be disappointed to learn that their insurance won’t cover all of their losses.
Damage caused by flooding isn’t covered by standard home insurance policies. Only homeowners who bought separate flood insurance for their homes were covered if storm surge destroyed their homes in coastal Louisiana. Meanwhile, if a home was damaged by the strong winds that came with Hurricane Laura, standard insurance policies will cover the damage, but homeowners will first need to pay out a deductible — a set amount of money a policyholder must pay before coverage kicks in.
“They have to do a cost benefit analysis,” said Michael Crowe, co-founder and CEO of Clearsurance, a site where consumers can review and compare insurance companies. The first category comprises disasters caused by rising water, which includes everything from floods caused by extensive rainfall and hurricane-induced storm surges to dam failures and tsunamis. “Earth movements” include disasters such as earthquakes, landslides and sinkholes.Unfortunately, many Americans are unaware that these disasters are not covered by a standard homeowner’s policy, according to the Insurance Information Institute.
Following a natural disaster, a consumer’s first step should be to contact their insurance agent or company immediately. That is critical because insurance claims are handled on a triage basis, McChristian said. A pricier option: Hire a third-party insurance adjuster to assess their property. Given the backlog insurers will experience following widespread disasters, it can take a while to receive a payout. To expedite this process, a homeowner can choose to hire an independent or public adjuster to assess their property.
But when insurance adjusters inspected the property, they noted that the basement’s sump pump — designed to prevent water accumulation — had failed. Tennessee and Florida require insurers to offer optional sinkhole coverage. Insurers in Florida are also required to provide insurance for “catastrophic ground cover collapse” through their standard policies.Did the homeowner take care of the property? The property’s upkeep can also play a role in whether or not damage caused by a storm or other natural disaster is covered.
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