Here’s how to evaluate homeowners insurance coverage amid hurricane season


Homeowners should ensure their coverage is equivalent to the replacement value of their homes.  (iStock)

Hurricane season runs from June 1 to November 30, and over the years, the storms that happen during this time frame have grown increasingly more violent. Not only has this led to the destruction of homes and businesses, but it has also created a complicated insurance response.

Those in affected states can prepare for hurricane seasons financially and physically. The American Red Cross recommends three specific steps to prepare yourself and your home for hurricanes and other natural disasters: get a survival kitmake a plan and be informed.

Homeowners looking to protect their homes during hurricane season should take extra steps to ensure their policies cover the total cost of the home. Many homeowners found themselves without adequate coverage over the last few years after being hit by natural disasters like hurricanes and floods.

Americans in the South and other areas that deal with hurricanes on a regular basis can prepare for hurricane season by:

  • Checking their homeowners insurance policy to ensure the replacement cost is high enough: Anyone in the path of a hurricane should make sure their homeowners insurance policy covers the total cost of rebuilding. If the payout is too low, homeowners are on the hook for the rest of the rebuild. But keep in mind, the market value of a home will typically be much higher than the cost to rebuild it. Insurance experts can help homeowners determine the appropriate coverage level for their home.
  • Understanding what disasters are actually covered under their policies: Many homeowners in 2023 found out flooding wasn’t covered under their standard homeowner’s insurance. To avoid the same confusion, all homeowners should contact their insurance providers and get a clear explanation of what natural disasters are covered. Insurers can offer additional coverage for certain events not covered in the current policies. Most homeowners insurance policies cover hurricanes, wind, theft, fire, explosion and lightning strikes, but certain damage may be left out, so it’s always good to check.
  • Fully understanding the deductible: Many insurance companies have separate deductibles for hurricane or windstorm damage. That means homeowners are paying their traditional deductible before the insurance company pays out to repair damage, and an additional deductible for any damage caused by a hurricane. Depending on the deductible, certain homeowners have to dish out thousands from their own pockets before their insurance company pays for any repairs.

Having enough insurance is vital. Having the appropriate insurance coverage is just as important. To ensure your insurance is suitable for your circumstances, visit Credible to check out plans, providers and costs.

FORECASTERS PROJECT ACTIVE HURRICANE SEASON AS HOMEOWNERS REMAIN UNPREPARED FOR DAMAGES

Insurers are increasingly pulling out of states due increase in natural disasters

Insurance companies have been pulling out of states left and right, largely due to the record high number of claims, in part because of more frequent natural disasters. States in the South have been hit the hardest by insurers leaving.

So far, 12 insurance companies have left the state of Louisiana. Since the four hurricanes that did substantial damage in 2020 and 2021, insurers have been bombarded with claims and are unable to keep up financially. 

California has also struggled to keep property insurers after wildfires wreaked havoc on the state the last few years. Big names like State Farm and Allstate temporarily pulled policies or opted not to renew other policies for thousands of homeowners across the state. The Hartford is one of the latest insurers that left California homeowners without property insurance. The company stopped offering new personal property coverage back in February.

“The homeowners’ insurance environment in California has unique challenges that have required us to reconsider the viability of writing new homeowners’ business in the state,” a spokesperson for The Hartford said.

Even the military and veteran-focused USAA limited the number of policies they plan to offer in California. The company didn’t outright pull policies like some insurers, but increased the wildfire safety requirements for all new home policies, making it much more difficult for residents across the state to take advantage of USAA policies.

Comparing multiple insurance quotes can potentially save you hundreds of dollars per year. Get a free quote in minutes through Credible.

SOARING INSURANCE RATES DRIVE AUTO INSURANCE SHOPPING RATES HIGHER: REPORT

Louisiana, Maine and Michigan to see some of the highest home insurance rate increases

Many states are likely to see homeowners insurance rates rise throughout the rest of the year, but a few will be impacted more than others.

Across the board, rates are expected to rise by 6% on average, the National Association of Realtors (NAR) reported. This is in addition to the 20% increase that occurred over the last two years. The average homeowner currently pays $2,377 annually, so the 6% increase brings that to just over $2,500.

“It’s possible that the highest-risk areas will become uninsurable,” said Betsy Stella, Insurify vice president of carrier management and operations. “However, where there’s demand, typically a supplier will appear. The question will be – at what cost?”

Three of the states expected to see the highest increase in rates this year are Louisiana, Maine and Michigan. Louisiana’s projected 23% increase in rates comes from a lack of competition as insurers pull out due to rising damage from hurricanes. Maine saw numerous floods in 2023 that have caused insurance companies to pay more out. The sudden increase in flooding is what’s driving the expected 19% increase in insurance rates.

Even seemingly natural disaster-free states like Michigan have seen a rise in storms. These storms paired with inflation costs are the reason for the projected 14% rate increase. Other southern states like Florida, Arkansas and Mississippi are expected to see significant rate increases as well.

See if you can lower your homeowner’s insurance rates today by using Credible to compare homeowners insurance companies and shop their plans.

NEARLY HALF OF ALL HOMEOWNERS CONCERNED WEATHER-RELATED EVENTS WILL RAISE THEIR HOMEOWNERS INSURANCE RATES

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