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In the wake of damage caused by hurricane/tropical storm Irene, many are left wondering how they will pay their deductible and what their claims will be like. For those lucky enough to escape the storm, many are rightly concerned with the possibility that the next one might strike their home. What will happen? If you have hurricane coverage, your insurer will take care of you, but you might have to pay a special deductible.

Hurricane Deductibles Versus Normal Deductibles

In places where hurricanes hit regularly, such as Florida, Georgia, and pretty much the entire Atlantic coastline, Gulf coastline, and New England, insurance companies do not charge a normal deductible. Instead, they charge a hurricane deductible.

The difference is that, rather than the flat amount you pay with a standard deductible, you pay a percentage of the market value of your home. So, if your home is worth $300 thousand and your hurricane deductible is 2 percent, you pay $6 thousand. This is almost always more than a standard deductible, such as $750.

Companies do this to save themselves thousands of dollars per home in claims, since they often have to pay to fix thousands of homes per hurricane.

Unless you live right on the coastline, in which case your deductible may be very high, hurricane deductibles rarely stray from the one to five percent range.

All states and districts subject to hurricane deductibles are:
The South and Southwest
Alabama, Florida, Georgia, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Texas, Virginia
The North and Northeast
Connecticut, Delaware, Maine, Massachusetts, New Jersey, New York, Rhode Island
Other
Hawaii, Washington, D.C.

Will Victims of Irene Have to Pay Hurricane Deductibles?

Hurricane Irene is tricky case, since it was not a hurricane the whole time. Before it hit New York and New Jersey, as well as Vermont and other more northern areas, Irene was downgraded from hurricane to tropical storm. While you might think this would be a straightforward case of nobody having to pay hurricane deductibles, the reality is different.

In New York and New Jersey, state regulators have declared that homeowners should not have to pay hurricane deductibles. So far, several insurers have come out and said that is the case and that they will not be charging more than the standard deductibles. However, other states have been less clear. Read the rest of this entry »

When facing an insurance case, people often find it frustrating to wait for the insurance company to settle their case and ask how long it takes to process a claim. Many customers look for legal support of their anticipation, asking if there are any laws regulating the duration of insurance procedures.

Every state has its own regulations and legislation concerning insurance activities to which the insurance companies have to abide. In some states you may also find things like “Unfair Insurance Practices Act” or “Unfair Claims Settlement Practices Act”, which are more specific and targeted at insurance activities in contrast with broader laws and regulations presented in other states. The nuances and specifics of such regulations have their own peculiarities across different states, however there are certain common points that they all share in regard to insurance companies, imposing them to: a) accept your insurance claim within a specific period of time (usually 15 days); b) conduct a prompt investigation on your claim a) make everything possible to process and settle the claim with a clear liability. Besides, the insurance company has no right to refuse your claim a payment without delivering a valid and clear reason.

In case you feel that your insurance agent or company representative did something without correspondence to state legislation, you might want to speak to the person’s supervisor first. In case the attempt wasn’t satisfactory, it’s time for you to file a report in your state’s insurance regulation department. If the department has other similar claims concerning the same company it will conduct an investigation and is likely to impose a fine or even revoke the company’s license if the case is quite severe.

In some states you are even allowed to take legal actions against an insurance company individually, if you feel to do so. In case you choose to pursue in a lawsuit against your insurer, there are certain regulations that might help you: a) broader interpretation of coverage provisions, b) limited interpretation of exclusion provisions c) favorable interpretation of any ambiguities contained in the policy. However, take into account that in certain states, in case you’re successful with your legal action you will only get the claim amount, while in other states you may also be reimbursed with court fees and punitive damages. Read the rest of this entry »

For most of us purchasing a home is the biggest investment to mike during the whole lifetime. And it’s reasonable that such an important investment needs reasonable coverage. That’s why you need homeowners insurance.

What’s included in homeowners insurance?

In case you finance your house purchase through a mortgage, your lender is most likely to require you buying basic homeowners insurance. The basic homeowners insurance includes coverage against the following risks:

• Theft
• Fire and lightning
• Smoke
• Frozen pipes
• Ice and snow

Basic insurance policies also include liability coverage for cases when someone is injured in your house. In case there are legal actions taken against you it will also pay for court fees. Basic insurance will also cover your costs in case it’s impossible to live in the house due to fire or any other damage.

What’s left out of coverage?

To learn what is not included into the coverage you should read through your policy, especially the Exclusions part. Things not covered by standard policies vary from one company to another, but most likely they will include damage due to earthquake, flood, nuclear accident, war, act of terrorism and similar. Still, you can purchase additional coverage for such events to be included into your home insurance policy. Wear and tear damage is never included into the policy because it’s considered to be maintenance, which is the owner’s sole responsibility.

How much coverage do I need?

When buying a house through mortgage loan your lender will require you to purchase minimum home insurance coverage (which is usually the purchase value of your home). However, it’s usually not the amount of coverage to meet your insurance needs. Instead, try calculating how much money it would require to rebuild your house entirely and use this amount as the base for getting the right coverage amount. Speak to your agent when completing the insurance policy to calculate the exact amount, or even run a full inspection for qualified appraisal. Read the rest of this entry »