In the theme of my previous blog, my intent was to write about what to do to prepare for a coming storm. A lot has changed in the last two weeks, though!
Unfortunately for many of our friends, family, and clients in the Lake Charles area, the storm already came. Our hearts and prayers go out to the many affected by the devastation of Hurricane Laura. On Saturday, I visited the Jennings, Welsh, and Lake Charles communities, and saw first hand the destruction and corresponding suffering Laura wrought. I am at least heartened by the faithfulness, resolve, and can-do attitudes I witnessed during my time there. We believe that our agency exists to serve not only our clients' insurance needs, but the needs of the clients themselves. In this spirit we always try to practice what we preach.
If you are reading this, and would like to help financially, please feel free to contact Catholic Charities or American Red Cross. If you feel called to help out in person, you can also reach out to our agency via email or give us a call, and we would be glad to connect you with one of the may teams of people going down to lend a helping hand.
Now on to the less pressing, but important insurance points for this week: Know your policies, and know your deductibles.
Every time a storm comes, I am always surprised at how many people don't know what is covered by which of their insurance policies. Even more folks don't know how much they will have to come out-of-pocket with to in able to be made whole. Perhaps the only thing worse than having to deal with the personal devastation after a storm is realizing that the insurance that you've dutifully paid for, years at a time without issue, won't pay for your losses until you come out of pocket personally.
Fortunately, if there was any saving grace to the ferociousness of Hurricane Laura, it was that the storms winds blew so furiously and it moved so quickly, that the majority of the damage was wind or wind-driven-rain-related. Wind damage is almost always covered under the homeowner's policy. Wind-driven rain damage is covered under homeowner's coverage as well. Flooding from storm surge, rising water, backed up ponds or sewers, however, is not. This is covered by a separate flood insurance policy. The vast majority of flood insurance policies are written on multiple insurance carriers' paper, but they are all insured by the National Flood Insurance Program, a division of FEMA. Some companies, do, however offer privately-backed flood insurance, both for personal and business markets. If you are not sure you have proper flood or homeowner's coverage, we should talk. This brings us to our second important point, deductibles.
Until somewhat recently, most insurance companies offered one deductible for all perils. This meant that the company would absorb all the costs of your losses, minus the deductible (the amount of loss that you are responsible for, usually a fixed dollar amount). Especially since Hurricane Katrina, however, many (but not all) companies have moved to a separate, percentage-based deductible for certain storm-related losses. While all of these storm-based deductibles are similar, they are not the same.
- Wind-and-hail deductibles (which apply to all wind and hail events)
- Named storm (Hurricanes, but also tropical storms or major other storm events, like Super Storm Sandy in NY)
- Hurricane only (everything covered under AOP deductibles but the Big Ones)
While the triggering events are different, the math on these deductibles is basically the same. For this instance, if your home was covered for $200,000, your storm deductible would be $4,000. If your policy was a $250,000 amount, your deductible would be $5,000, and so forth. Key takeaway: the higher the coverage amount on your home, dwelling, or business, the higher your deductible would be. While we always want to make sure our clients are adequately covered, if you have too much insurance, you may end up paying too much not only once, but twice! If you have questions about your deductible, whether you were affected by the storm or not, and whether you are a current client or not, we are here to help. Please feel free to reach out to us with any questions you may have, or to let us know about whatever needs you may be facing in your community.