By Daniel A. Espinosa, Esq.,
Doral residents should brace themselves for a busy hurricane season. For the next few weeks, my column will focus on the importance of being proactive during hurricane season. The most important thing you can do is be informed and prepared. The proper preparation will help minimize damages. This includes modifying your home to strengthen it against storms to make it safer. Additionally, you should have the necessary supplies to weather the storm. The most important disaster-prevention tool, however, is to ensure that you have proper insurance coverage when disaster strikes. Otherwise, you’ll be staring in the face of a double disaster—a damaged home without the money to fix it.
Hurricane hazards come in many forms, including storm surge, high winds, tornadoes, and flooding. This means it is important for you to have a plan that addresses all these hazards. The first and most important thing anyone should do when facing a hurricane threat is to use common sense.
Most homeowners wait until a hurricane is bearing down on them before they start wondering what damages are covered under their insurance policies. The problem, however, is that once a hurricane warning is declared, insurance companies refuse to underwrite new policies or make modifications to existing ones; therefore, now is the time for homeowners to have an attorney review their insurance policies to understand what is covered—and what isn’t—in the event a hurricane strikes in 2012.
Homeowner policies usually cover damage from wind and rain. Most policies now carry a special hurricane deductible between 2 percent and 5 percent of the home’s value. Check to see how much your insurer will pay to rebuild your home. The amount should reflect the current value of the home, which should be automatically adjusted by your insurer each year.
A big misconception is that flood damage is covered by the typical homeowner policy: it is not. Most homeowner policies don’t cover damage caused by rising waters. For example, if a hurricane tears the roof off a home and rain damages the interior, the homeowner policy would cover the home and its belongings because the damage was caused by “wind-driven rain.” But if water from a flooded street or lake invades the home, the owners are out of luck unless they bought separate flood insurance.
Flood policies are administered by the federal government’s National Flood Insurance Program. They can be purchased through conventional insurers, which act as administrative middlemen for the government. The government had to offer this insurance to homes built in areas designated by state and local authorities as being susceptible to flooding because private insurers refused to do so. A lot of people are unaware of this additional coverage, which could cost them their home.
People that live near the ocean or a large lake already have flood insurance because most banks refuse to grant a mortgage in flood-plain areas unless the homeowner insures against flood damage. But not every area surrounding a body of water is designated as a high-risk area, so it is likely that many Doral residents do not carry flood insurance. Homeowners who are unsure whether they live in a flood plain should call their insurance agent.
Keep in mind that homes not situated in high-risk areas can flood, too. One out of every four flood disasters in the United States occurs in an area outside a flood plain, according to the Federal Emergency Management Administration, which manages cleanup efforts after natural disasters.
Insurance agents suggest homeowners must decide whether it is worth the extra cost to carry flood insurance, which can be as low as $200 a year for people living outside of flood plains. But here are some general guidelines homeowners can follow to make the decision easier. On the one hand, if you live on a hill, you may be safe. On the other hand, if you are low-lying area, you may have some problems. Either way, it’s better to be safe than sorry by having an attorney review your insurance policy before disaster strikes.
Daniel A. Espinosa, Esq., is the founding partner of ESPINOSA | JOMARRON, a full-service law firm in Miami’s Midtown area. For more information or for a free evaluation of your insurance policy, you can e-mail him at firstname.lastname@example.org. Feedback, comments, and questions are welcomed.