When You Need it Most - Purchasing Ample Insurance Coverage
2008-07-10
Hurricane Katrina in 2005 was very costly to homeowner's and business owners in the Gulf States. Many believed that they were well insured in the event of a hurricane. They carried their business and homeowner's insurances and carried hurricane policies. Your hurricane rider on your policy will protect against hurricane caused rain and wind. It will cover against wind and rain related water damage. If wind causes you to lose a window or to lose a part of your roof, and you get rain water inside of your business or home, you would be covered under your hurricane policy.
But little did everyone know; a hurricane policy does not cover against flooding. Flooding that was caused by the wind-caused storm surge and when the levees in New Orleans broke, were no longer covered by their hurricane policies. Insurance companies were able to find a loophole in the policy, and required that owners have a flood insurance policy to be covered. Many did not carry flood insurance because they were told that they did not need it because they were well protected by levees systems.
After Katrina, flood zones were redraw to include areas that may flood again. Though you may be in a 100-year flood zone (meaning that you could see a flood one time in 100 years) it is still in your best interest to carry flood insurance. The premiums that you will pay will be well worth it in the event that you do get flood damage.
Another obstacle that many discovered was that they were unaware that the deductibles on their hurricane and flood insurance policies were much higher than their standard home or business owner's policy. It is generally not a flat fee, but a percentage of the overall value of the property. For homeowner's this figure can be devastating, and some business owner's it may be nearly impossible. For many non-profit companies they don't have those kinds of funds readily available and needed to rely on donations or dip into other necessary funds to make the needed repairs.
The best thing that any home or business owner can do is to set aside enough money that would cover their deductible in the chance of a natural disaster. Having the money readily available will save you the unnecessary stress of finding the money elsewhere.
When owning you home of business, you need to make sure that you fully insured with all necessary policies. By discussing this with your insurance agent, you can rest assured that you will have the necessary coverage that you need.