Blame It On the Rain: Protect Your Home With Hurricane, Wind, and Flood Insurance

Choosing the best insurance policies for your home can cause a lot of

confusion. Many homebuyers are not fully educated about the coverage

needed to protect a home or real estate investment. Many difficult

situations can be caused by natural disasters. If you purchase real

estate in or relocate to an area prone to hurricanes or floods it is

important to know you have sufficient coverage. Read your policy

carefully, ask questions and know the facts. Consider all of the options

and get the advice of a real estate or insurance professional you can

trust.

Come Rain Or Come Shine

Hurricane insurance is also referred to as Wind and Hail insurance and

it works to cover the cost of rebuilding your home in the event of

hurricane damages. Knowing the full extent of your coverage is

essential. First choose the best deductible. Homeowners can purchase

Wind and Hail insurance with a deductible based on a percentage of

damages that may occur. This deductible will increase as the amount of

damages increases. The monthly payments are often lower, but the out-

of-pocket expense is higher. Homeowner’s can also purchase

hurricane insurance with a fixed “all peril” deductible. This means

whether you have $2000 of damage or $50,000 you pay the same

deductible. You may pay a higher monthly payment, but in high-risk

areas an “all peril” deductible can save thousands of dollars.

You should also be certain your policy contains specific coverage such

as Loss of Use. This provides funds for you to return to your home and it

can even cover a dwelling on your property while you reconstruct. The

amount you are paid depends the value of your home. Contents

Replacement Cost is another form of coverage that can be beneficial. It

allows you to have your items replaced at the current value. You can

choose to receive cash as well, but the cash value of the items is subject

to depreciation. A Living Expense Clause is another good option for

protection. It provides homeowners with an income while recovering

from hurricane damage and loss.

When The Waters Keep Rising

Flood insurance and hurricane insurance are separate policies. Flood

insurance is a product of the National Flood Insurance Program, which

is part of FEMA. Flood insurance cannot be paid by escrow it must be

paid up front by the insured. According to the official website of the

National Flood Insurance Program (NFIP), floodsmart.gov floodsmart.gov, flood

insurance covers “structural damage and mechanicals…flood debris

cleanup and floor surfaces like tile and carpeting.” You can purchase

more coverage to insure personal property, such as furniture and

appliances. In order to purchase a flood insurance policy homeowners

and real estate investors must own in a low-risk or high-risk community

that participates in the NFIP. There are three standard Flood Insurance

policy forms offered by the NFIP: the Dwelling Form, the General

Property Form and the Residential Condominium Building Association

Policy form. Each policy is based on how the building is occupied.

When Disaster Strikes

If a natural disaster occurs in your region and many residents suffer

damage by wind or flood there are many options for homeowners in

financial trouble. The US Department of Housing and Urban

Development has a special insurance program that falls under

Section203(h) of the National Housing Act to assist disaster victims.

You can learn more about this program at hud.gov hud.gov. Lenders such

as Freddie Mac and Taylor, Bean & Whitaker also offer special

programs to assist disaster victims. Many lenders have encouraged

mortgage brokers to suspend late fees and delinquency penalties for

hard hit coastal areas. They have also enacted grace periods so

homeowners can refrain from making mortgage payments and avoid

being reported to the Credit Bureau. Also, many states have emergency

management departments that work with FEMA is situations like

Hurricane Katrina. These agencies, like the Virginia Department of

Emergency Management, can be of service to any homeowner in

Virginia living in a region declared a Major Disaster Area by the

President of the United States.

When you invest in real estate it is essential that you understand the

types of insurance coverage that will best protect your property.

Research your region and get advice from the professionals. To learn

more about homeowner’s insurance please visit

vonncannonrealestate.com [vonncannonrealestate.com] and read Dangerous Liaisons: Tips

For Securing Homeowner’s Insurance.

Elaine VonCannon is a REALTOR with RE/Max Capital in Williamsburg, Virginia, and she specializes in retirement and relocation in the Williamsburg area. She is an Accredited Buyer's Representative as well as a Senior Real Estate Specialist. Elaine VonCannon also works with real estate investors and home sellers.