What Does Windstorm and Hail Insurance Cover?

If you live in a coastal region, your home is at risk of hurricane damage.  Your home is important to you and likely you have home owner’s insurance.  But is it insured for windstorm and hail?  How about flooding?  It is important to know what your policy covers.

Windstorm insurance does not cover flooding.Homeowners’ insurance may not cover windstorm, hail or flooding.  It is important to know the risks of the area you live.  For instance, when a hurricane comes, if it doesn’t blow a hole in the wall or rip off part of your roof, you may not be covered for water damage.  Hurricanes bring a tidal surge with them which is labeled flooding by the insurance companies.  If you don’t have flood insurance, you might just be trying to figure out how to pay for an uninhabitable home.

If you live in Texas, you may download a sample of the Texas Windstorm and Hail policy.  Variables are deductibles, premiums, and payout.  Read through the policy to determine what other types of insurance you will need.  Remember, when you file a claim, your property will be “depreciated” by the insurance company.  In other words, you will never get enough money to make life normal again.

The amount of coverage you buy is important too.  Insuring for less than 80% the total value of the property will trigger another depreciation clause on the dwelling.  But, as with all insurance policies, they will never pay out more than the total dollar amount for which you paid premiums.

The policy is very clear on which events it will and will not pay claims.  The policy premium must be paid more than 30 days before the storm to be in effect when a hurricane makes landfall in your neck of the woods.  Keep in mind that policies change from year to year, so you need to evaluate your coverage yearly.  If you don’t understand the policy, ask a licensed insurance agent.

Edit:  Changed “. . . does not cover windstorm . . . ” to read “. . . may not cover windstorm . . .”

Edit:  Changed “. . . you are not be covered . . ” to read ” . . .you may not be covered . . .”

photo by: DVIDSHUB

2 comments for “What Does Windstorm and Hail Insurance Cover?

  1. oopConsultant
    May 18, 2013 at 5:19 pm

    You must be insured to 80% of the replacement cost of the home not the value. If not there is a co-insurance penalty. Normally the payment is a ratio of %of insurance carried of the 80$ Replacement cost divided by the amount required (80% of replacement) Example: if the home has a replacement of $100,000, the required amount is $80,000. If you carry %60,000 the penalty is 25%. However, usually the penalty can not be less than the actual cash value of the loss.

    When you talk about the 30 days prior, that only applies to Flood insurance. In addition, that only applies if you owned your and at a later date you put flood insurance on it. When you buy a home or borrow on a home, and the lender requires you to carry flood insurance on the home, it is effective as of the date you bought it. In addition, it you had a policy prior to the storm and your premium is due you have 30 days to pay to re-instate, if you were late paying, even if a storm has hit.

    Usually, when a storm is in the gulf, you can not buy homeowners insurance.

    Most home insurance policies including flood have a replacement cost provision in it. Read the settlement portion of the police to verify that if applies in your case. In all cases you must comply with all provisions of the policy.

    • May 18, 2013 at 5:36 pm

      Thanks Wally! You are so right about that. People who don’t have TWIA and have some other kind of insurance should look carefully at their policy to see what their share will be should a disaster happen. In some states the share is from 1% to 5% (or more?). So if your home is valued at $500,000 the 1% share would be $5,000. That’s considerably more than a deductible of $500 or $1,000. There are a bunch of things that need to be considered and known in advance. For that same house, if your share is 5% you will need to come up with $25,000 of the replacement costs. For sure insurance is a complicated business with the insurance companies doing everything they can to reduce risks and pay out as least as possible.

      It is the insurance companies, among others, who lobby congress on state and federal levels to implement safety regulations from everything to requiring smoke alarms in apartment buildings to safety belts in cars. Insurance companies do research to determine ways to save lives in auto accidents and so on. While on the one hand people don’t like “greedy” insurance companies, you gotta admit they have been leaders in making sure cars and homes are safer.

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