Navigating insurance coverage for extreme weather: Tips.

The frequency and cost of severe weather events in the U.S. are both on the rise. In 2023, the country marked a record number of weather or climate disasters costing over $1 billion, with 28 such events occurring. Now, some homeowners are discovering that their insurance providers do not cover all their expenses in the event of a disaster.

Mark Friedlander, the director of corporate communications at the Insurance Information Institute, discussed the costs of climate and weather-related insurance with Scripps News and advised consumers on what to watch out for.

“One crucial aspect of home insurance policies is dwelling coverage, labeled as ‘Coverage A’ on your declarations page. This represents your replacement-cost coverage,” Friedlander explained. “If you have not updated this recently, you may face a shortfall in the event of a loss. Our analysis from 2019 to 2022 showed a 55% increase in replacement cost due to rising construction material costs and labor shortages, nearly four times the consumer price index. It’s essential to have adequate replacement-cost coverage in your policy to ensure protection from risks like those discussed today.”

Do you require a specific deductible for hurricanes?

“It’s crucial to understand the details of your policy. If you reside in a hurricane-prone state, you generally have a standard deductible for all damages and a separate deductible for wind damage from named tropical systems,” Friedlander noted. “Ensure you have the right coverage levels. Identify any gaps by conducting an insurance checkup at least annually, particularly now as hurricane season begins. Many homeowners are unaware that standard home policies do not cover floods, requiring separate coverage through the National Flood Insurance Program or a private flood insurer.”

If you have unique coverage or require it, know when it takes effect

“Most standard policies cover wind storms, with separate deductibles for wind or wind and hail in hurricane-prone or tornado-prone states,” Friedlander stated. “Understand when this separate deductible is activated, as outlined in your policy. If unclear, contact your insurance agent for clarification. While you are likely covered for all wind-related damages, it is important to comprehend the triggers for the special deductible versus the standard deductible.”