As you settled in and battened down the hatches – or boarded up your windows and headed out of town – ahead of Hurricane Sandy, you probably gave a secret sigh of relief that your homeowner’s insurance or other building insurance was up to date. “At least I’ve got insurance on the property,” you likely told yourself as the stories swept over the news and the storm swept up the coast. However, thanks to new fine print, you might not have the insurance on your structures that you thought. In fact, a new “hurricane deductible” that kicks in whenever winds exceed 74 miles per hour, could mean that you must pay one- to five percent of your property’s total value toward repairs before your insurer starts helping with the bill[1].

Although most insurance companies have had these deductibles in place since the 1990s, many people are unaware of the somewhat unusual caveat or assume that “hurricane insurance” just plain covers hurricane damage. Homeowners and business owners who have insured their properties against storm damage, however, may not actually be protected from floods or hurricanes[2]. In fact, many flood policies actually provide cash value for items lost rather than cost of replacement for damage done. If you have suffered damage from Sandy or any other weather-related event, be sure to document the problem carefully and check with your insurance agent to make certain that you are filing your claim properly.

Have you ever had problems with flood or hurricane insurance?