We’re right in the middle of hurricane season and many people assume that their Rhode Island homeowner’s insurance will cover all damages caused by a hurricane, but that’s not the case.
What Do Most Rhode Island Homeowner’s Policies Cover?
Typically, in Rhode Island, homeowner’s insurance policies cover wind damage such as a tree falling on the roof or debris that breaks windows. It also covers other perils such as hail, lightning, fire, theft, vandalism, and explosions. However, every policy differs so it is important you understand what your policy covers, and what it doesn’t.
Insurance policies vary greatly between carriers and they realize paying for hurricane damage is very expensive. Consequently, many policies include clauses that transfer risk to the insured, exclude, or limit coverage. The “anti-concurrent causation clause” is one example.
This clause states that if an insured event, such as damage from high winds, occurs around the same time as an event excluded from your policy, such as flooding, they won’t cover either and it doesn’t matter which occurred first. As a result, many homeowners discovered they had no coverage for wind damage after Hurricane Katrina.
Many insurance policies also exclude wind damage if you live in a coastal area, but you can often buy a separate policy.
Some policies also include a separate hurricane deductible that kicks in when a hurricane occurs. The insured can pay anywhere from 1% to about 10% of the total insured value of the building or its contents, before the insurance company pays for damages.
All policies include limits. If you automatically renew your coverage without a review, it can leave you underinsured since the cost of repairing or rebuilding your home continually increases and your policy limit does not reflect this. Plus, materials and labor often spike after a natural disaster.
Flooding Isn’t Covered
Homeowner’s and renter’s insurance policies do not cover flood damage caused by a hurricane. Your insurance agent can investigate whether your area qualifies for a National Flood Insurance policy and can sell you a policy.
The program offers coverage of up to $250,000 for home repairs and $100,000 for personal possessions. Policies include a 30-day waiting period before they take effect.
If you buy a home with a federally backed mortgage in a high-risk area, you’re legally obliged to buy basic flood insurance. However, according to FEMA over 20 percent of flood damage occurs outside of high-risk areas and flood damage is very expensive. Just 1 inch of water in an average 2500 sq. ft. home costs around $29,000 in losses. If you have a larger home or higher flood waters, you’ll pay considerably more.
Buying an insurance policy based on price alone isn’t wise. Homeowners need proper coverage and it isn’t easy to decipher the language in insurance policies. Rely on the expertise of a professional, independent insurance agent. They understand the industry and what you need to protect your home well.