Do You Need Hurricane Insurance?

If you live in an area subject to hurricanes, you should weigh your need for hurricane insurance. Your decision, and the costs you have to pay, will be based on several factors, such as where you live, what your house is worth, and how high a deductible you’re willing to pay.

Check Your Current Insurance

Do you even need hurricane insurance? Details vary by policy and by state, and there’s a thin line between what your standard home owners policy covers and what you might need hurricane insurance for.

  • Check your policy for any limitations on wind and water damage. Your home owners insurance may cover damage from wind and wind-driven rain.
  • Make sure your home owners policy doesn’t exclude hurricane-related damages altogether. This is especially likely in hurricane-prone states like Florida, Texas, and Louisiana, where insurers may require supplemental hurricane insurance or separate windstorm and flood policies.
  • Check exclusions even if you do have hurricane insurance: your policy may exclude damage from floods caused by rising water, no matter the source. In that case, you will need separate flood insurance.

The Cost of Hurricane Insurance?

The cost of comprehensive hurricane insurance can vary wildly:

  • $300 for a modest house in a low-risk area.
  • $20,000 or more for a luxury home in a high-risk zone.

You can save money by buying through a high-risk insurance pool that offers hurricane insurance, typically available in hurricane-prone areas. Check with your state insurance commissioner.

On top of the premium, policies in states susceptible to storms can come with hurricane deductibles, which typically range from 1%-5% of the insured value of a home. A standard deductible, say $500, would apply to claims that aren’t hurricane-related.

Hurricane insurance deductibles usually kick in when damage results from a named storm. That means if your house is insured for $200,000, and it’s damaged in a hurricane, then the hurricane deductible will range between $2,000 (1% of insured value) and $10,000 (5%). Some states allow home owners to choose the hurricane deductible — the higher the deductible, the lower the premium — while others set deductible levels.

Ways to Lower Your Hurricane Insurance Costs

The following changes may reduce your hurricane insurance costs:

  • Storm shutters
  • Wind-resistant roofing
  • Hurricane straps, clips, and anchor belts
  • Garage door braces
  • Secondary water protection — essentially an extra layer of waterproofing between shingles and the roof sheathing

In Florida’s Miami-Dade County, for example, the annual premium for hurricane insurance on an older home insured for $150,000 runs between $3,000-$8,000, assuming no mitigation improvements and a 2% hurricane deductible. With mitigation improvements, the same home would cost $1,000-$3,500 to insure.

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These articles are not intended to give legal or tax advice, and you should consult your attorney or financial advisor for additional information.

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