Community Corner

Property Owners May Pay More For Hurricane Damage

Rhode Island residents may be subject to additional hurricane deductibles.

Rhode Island residents whose property is damaged by Hurricane Irene may discover they’ll be paying more for repairs than expected.

The Associated Press reports that most homeowner insurance policies  include a deductible that’s typically $500 to $1,000, but out-of-pocket expenses for hurricane damages can be much higher.

“In 18 states on the East and Gulf coasts, insurers are allowed to include hurricane deductibles in homeowners policies," the AP reported. "These amounts apply only to hurricane-caused damage, and typically range from 1 percent to 5 percent of the insured value of a home. Deductibles may be higher in some coastal areas. For example, a policyholder whose home is insured for $200,000 with a 2 percent hurricane deductible would have to pay the first $4,000 to repair hurricane damage.”

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And if you have flooding, that’s an entirely different problem, insurance-wise. The AP said that flood-related damage from a hurricane may not be covered unless the policy holder has flood insurance. Damage to your car will be covered only if you have comprehensive insurance.

A more thorough discussion of percentage-based deductibles is provided by the Insurance Information Institute.

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For advice on what to do next, property owners should call their insurance agent or the insurance division of the Rhode Island Division of Business Regulation at 401-462-950.

The website also has a list of things property owners should do before and after a hurricane concerning insurance. Some of the top suggestions for after the storm:

• The days following a natural disaster can be confusing and stressful, but it is important that you focus on filing your insurance claim(s) as quickly as possible to help protect your financial future.

• The first step to getting your home restored is to contact your insurance company and/or agent with your policy number and other relevant information. Be aware that your policy might require that you make this notification within a certain time frame.

• Take photographs/video of the damage before clean-up or repairs. After you've documented the damage, make repairs necessary to prevent further damage to your property (cover broken windows, leaking roofs and damaged walls). DO NOT have permanent repairs made until your insurance company has inspected the property and you have reached an agreement on the cost of repairs. Be prepared to provide the claims adjuster with records of any improvements you made prior to the damage. Save all receipts, including those from the temporary repairs.

• If your home is damaged to the extent that you cannot live there, ask your insurance company or insurance agent if you have coverage for additional living expenses.

• Cooperate fully with the insurance company. Ask what documents, forms and data you will need to file the claim. Keep a diary of all conversations you have with the insurance company and your insurance agent, including names, times and dates of the calls or visits and contact details.

• Be certain to give your insurance company all the information they need. Incorrect or incomplete information may cause a delay in processing your claim.

•If the first offer made by the insurance company does not meet your expectations, be prepared to negotiate. If there is a disagreement about the claim, ask the company for the specific language in the policy in question and determine why you and the company interpret your policy differently. If you believe you are being treated unfairly, or if the delay is unreasonable, contact the Rhode Island Insurance Division.

• Even after settling your claim, if you think of items that were not in your initial loss list, contact your insurance company. Unless the company has paid the entire limit for the coverage of those types of items, it is possible the company will make an additional payment.

• If your damages exceed the amount of your coverage, federal agencies will occasionally provide grants or low-interest loans to assist with recovery following major disasters. Check with the State of Rhode Island Emergency Management Agency at 401-946-9996 or www.riema.ri.gov for additional information.

Residents who don't have hurricane insurance but who sustain losses may qualify for federally subsidized loans, if the resident is in an area the president declares a disaster. Small Business Administration handles these loans.

Details of that program are in the attached PDF.




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