Many homeowners on the East Coast have learned a valuable lesson in the wake of Hurricane Sandy, and it’s a lesson Florida homeowners can take from as well. The lesson is this: Many homeowners whose properties were ravaged by Hurricane Sandy did not understand their insurance policies and as a result will not be compensated for the hurricane’s damage.
What thousands of homeowners failed to realize is that flooding is not covered under most standard homeowners insurance policies. Additionally, others knew that they had flood insurance, but were shocked to find out that many of their losses were not covered under their policy. Insurance companies themselves have admitted that this is a problem and one that they struggle to address.
Another problem that Sandy victims have come to deal with is that standard flood insurance, which is supported by the National Flood Insurance Program, covers only up to $250,000 in damage per dwelling. Additionally, the insurance leaves out the contents of flooded basements beyond utilities such as washers, dryers and boilers.
So what will insurance policies cover in Sandy’s wake? In New Jersey alone, it is expected that Sandy unleashed $4 billion worth of insured damage. It is predicted that homeowners insurance policies will cover about $2.5 billion; commercial property insurance will cover about $1.3 billion; and automotive policies will cover about $250 million.
At this point, it is unknown how much homeowners and business owners will end up paying to supplement the destruction.
What is clear, though, is that homeowners and business owners in Florida — and other areas exposed to hurricanes and tropical storms — should take a careful look at their insurance policies. Of course, it is always better to address insurance issues before catastrophe strikes.
Source: The Star-Ledger, “Costly lesson of Hurricane Sandy: knowing what home insurance covers,” Ed Beeson, Dec. 7, 2012Share