Friday, September 5, 2014

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

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),, 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 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.