Taking Storm-Proofing Into Your Own Hands

Insurance Coverage

Be sure your home and family are adequately protected before a storm hits. Arm yourself with information about your insurance policy by reviewing it with your insurance company or agent. Discuss the following:

Deductible: The deductible is the amount of loss paid by the policyholder before any loss is paid by the insurer. The more the deductible is, the less the premium. A deductible can be based on the value of a home or a fixed dollar amount. In hurricane-prone areas, deductibles may range from 1 to 5 percent of the value of a home.

Actual Cash Value: This coverage provision pays damages equal to the replacement value, minus depreciation. This will most likely result in a payment that is less than the cost to replace with new items.

Replacement Cost Coverage: This coverage provision pays damages equal to the replacement cost with no deduction for depreciation, but may be subject to policy limits.

Functional Replacement Cost: The functional replacement cost is payment of repairs made using common, modern materials and methods without deduction for depreciation. If the property is a total loss, the payment will be the market value of the home.

Flood Insurance: Flood damages are not covered under a standard homeowners insurance policy. Flood insurance can be purchased through many companies from the National Flood Insurance Program, administered by the Federal Emergency Management Administration. When deciding on purchasing flood insurance, keep in mind that a flood can occur as far as 500 miles from a hurricane. Be proactive and timely — there is a 30-day waiting period to purchase flood insurance.

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