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Hurricane Insurance FAQs

by John Karcher, Published August 27, 2012, FOXBusiness

Hurricane Isaac is barreling towards the Gulf Coast, forcing many businesses  and homeowners to check their insurance plans.

Of course, the best time to prepare for hurricanes is before they are headed  your way, but it’s never too late to plan. Here are answers to some commonly  asked hurricane-insurance questions, answers that can help you prepare for the  storm:

I live in an area that has lots of hurricanes — should I buy extra  insurance?

“It’s more important to know what coverage you have before looking at  adding more insurance.” notes Mike McCartin an independent insurance agent  with Joseph W. McCartin Insurance in College Park, Maryland. Examine your  plan and see if a “named storm deductible” is included. Is wind damage  included? In Florida, for example, you must purchase a separate policy for wind  coverage. Florida averages about 2-3 hurricanes per year.

Other than flood coverage, you would not need extra coverage in states that  allow insurance companies to include wind damage in the typical homeowners  policy.

“Talk to your agent about your state’s regulations.” says McCartin.

Is flood damage covered by my homeowner’s policy?

To be protected from flooding, you need a separate flood insurance  policy. And make sure you have enough coverage. If the cost to replace your  dwelling is more than the federal flood insurance limit, you should  consider purchasing an excess flood policy.

Make sure you review the dwelling-replacement cost annually with your  agent and be sure you have enough coverage to rebuild in the event of a total  loss.

Can I change my plan a couple of days before a hurricane hits?

Once a warning or watch has been issued, you generally cannot change your  policy. Also, flood policies have a 30-day waiting period before they  become effective.

What about coverage for my business?

As a general rule, homeowner policies are pretty comprehensive in terms of  the coverage provided. It is more an issue of having enough coverage to  rebuild — being aware of deductibles — and understanding that flood insurance  is excluded and must be purchased separately.

For business owners, deductibles and exclusions are similar, but it is very  important that you understand that the policy will not pay more than the  building or contents limit purchased. In fact, there may even be penalties for  not purchasing enough coverage.

Also make sure you have purchased loss-of-business-income coverage. This  important coverage will help to minimize a financial loss if your business is  closed for an extended period of time due to a covered loss.

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