How to Prep for Hurricane Season: Review Your Homeowner’s Policy
If you’re a homeowner, then having a homeowner’s policy is a standard part of the package. It’s a general requirement of securing a mortgage loan. But did you really look at it, and when was the last time you reviewed what it covers?
Standard Features of a Homeowner’s Policy
A standard homeowner’s policy should include coverage of:
- Structure – the bones of the house & other buildings on property (sheds, etc)
- Personal Property
- Liability Protection
- Additional Living Expenses
Structure is clear. This part of the insurance policy covers the value of the home. Personal Property is also pretty self-explanatory. This covers the stuff you’ve purchased and put into the home. Liability protection is a buffer to protect you from other people coming after your house, in the off chance that you are found at fault for an accident or for other damage that may cause a person to sue you. And the not oft mentioned Additional Living Expenses (ALE) feature covers expenses incurred when the property is in repair and the homeowner has to stay elsewhere. It reimburses such expenses as hotels, restaurants, etc.
Are You Hurricane Ready?
You might not have considered checking your homeowner’s insurance policy as an item on your to-do list along with the:
- Homeowner’s Insurance Policy Review
The weather is unpredictability these days. It will serve you in the long run to cover all your bases. The structure is the primary component. It covers the value of the property, no if, ands, or buts about it. The areas that need extra review (and possibly extra cash allocated to it) are Personal Property and the Additional Living Expenses categories.
Personal Belongings coverage typically accounts for “50 – 70%” of most HO policies. But depending on the kind of things you own (for example if you own diamond jewelry and a Maserati) you may want to buy additional coverage and create an itemized list to cover the cost of each possession in case of loss or damage.
A major inclusion that’s often overlooked is that Personal Belongings includes the landscaping of your property. Trees and shrubs are the primary things damaged during a major storm. And under the Personal Property clause of your homeowner’s insurance policy each aspect of your property’s landscaping can be restored up to a certain dollar limit.
Additional Living Expenses (ALE)
This is a benefit I’ve just learned about and it’s awesome! Let’s say you’re in an unlucky position of encountering a severe hurricane (i.e., Long Island, New York during Hurricane Sandy). You survive with your health and livelihood intact, but your property is in need of major repairs. Your home is flooded & damaged to the point you cannot live in the property. ALE would cover the nights you stay in a hotel, the food you buy, and other house comforts you are now forced to pay for because you are temporarily homeless.
The primary caveat is that insurance companies may limit your length of hotel stay and other benefits. Again each circumstance is different, so depending on your particular situation you may be afforded an extension.
Be Ready For What Comes, Hurricanes & Other Bad Weather
As with anything in life, don’t assume you’re covered, make sure of it. Review those important insurance documents. You may need to bring it to the insurance professionals and have them explain the policy features. Verify the following:
- Itemize Your Personal Belongings:
- Add more coverage if needed.
- Note the disclaimers in your policy:
Determine if your insurance works for you now. Your home, livelihood, and overall well-being depend on it.
- Some suggest creating a picture inventory of your belongings and keep it safeguarded.
- What won’t the insurance company cover?
- Know what to do in the event of an accident or claim.
Stasie Tillman is a writer & an investment and personal finance analyst. She oversaw the Analytics department for a prominent Long Island bond brokerage firm for many years. She’s the founder of AStoicLife.com a faith and lifestyle website that focuses on encouragement and inspiration to lead a balanced life in all aspects (mind, body, and spirit). She writes on various topics but mainly on practical matters such as finances, parenting, faith, & current events. Contact her on the Work With Me page on AStoicLife.com or via LinkedIn.