Earthquakes, Hurricanes, and Floods: What’s Next??

By:  Ashley Western, ACSR, MSM RMI

The weather events of 2011 have impacted almost every corner of the United States.  From tornadoes, to floods, to oddly-placed hurricanes, and now earthquakes in the Northeast?  This pattern is enough to make anyone second guess their level of preparation. 

While the city of Houston has not been directly impacted by these events, our turn might be next.  Before the next weather event strikes, now is the time to ensure you have proper insurance coverage. 

Here are steps to consider:

Review homeowner's policy - An annual homeowners policy review is important, and ensures you are covering enough limits to replace all you belongings.  We recommend adding in a limit which encompasses slightly more coverage than what covers your current belongings, so you have room to grow.  Also, adding an inflation guard endorsement to the policy also ensures your limits go up with the cost of construction in the area.  Law and Ordinance coverage would also help, as this covers expenses to bring your home up to code. 

Also, be aware of your separate windstorm deductible.  While you may carry a relatively low deductible for fire and other perils, wind and hail typically comes with a larger deductible in our area- often a percentage of total limit available to cover your home.

Flood insurance- Hurricane Irene was relatively weak, but most of the damage was caused by flooding.  And Houston knows this firsthand, due to Tropical Storm Allison of 2004.  Just because a storm does not pack a windstorm punch, doesn’t mean it’s not damaging.

Floods aren't covered under homeowner policies, and they’re not covered under business policies, either. Protection is available under the federal National Flood Insurance Program; you can buy a policy through our office. The coverage becomes effective after 30 days.

The maximum coverage is $250,000 for structural damage to a house and $100,000 for contents. For businesses, the maximum coverage is $500,000 for building, and $500,000 for contents.  Premiums, tied to how prone your neighborhood is to flooding, can range from a couple hundred to a few thousand dollars, depending on your area. It is possible to buy excess flood insurance, but it is proportionately more expensive than NFIP’s program.

If you want a federal flood policy, buy it before Sept. 30 to play it safe. The federal flood program expires on that date, unless Congress extends it. And if Congress doesn't act - and it has let the program lapse before because of legislative squabbles - you won't be able to buy or renew a policy. Existing policies will remain in effect, though.

Earthquake insurance Earthquake insurance is not part of a standard homeowners policy.  However, it is relatively easy to add.  Ask your insurer for the cost of the endorsement- considering the recent Earthquakes in Virginia and Alaska, it may be worth a few bucks a year. 

If you have a claim, it will be much easier if you’ve kept a rough listing of the items in your home or business.  Utilize a camcorder, or take photos of each room, just prior to evacuating.  This list should also be updated semi annually, or any time you make a large purchase.  Businesses should keep an itemized list of all equipment & furniture.

The National Association of Insurance Commissioners offers free inventory apps for iPhones and Androids at http://www.naic.org. 

It is also a good idea to keep a fireproof safe with important documents, or keep duplicate copies of important documents in an additional location. 

Risk Management takes time investment, but in the event of a claim, you’ll be glad you took these simple steps to protect yourself.