New York Gov. Andrew Cuomo is urging to take steps now to protect their homes in the event New York is hit by any of the nine to 15 storms the National Oceanic and Atmospheric Administration (NOAA) predicts for the 2012 Atlantic hurricane season.
As many as three of those storms are predicted by NOAA to strengthen to hurricane force with top winds of 111 miles per hour or higher. Hurricane season extends through November 30.
“New Yorkers need to act now to make sure their homeowners’ policies offer an adequate level of protection against storm losses,” Gov. Cuomo said Thursday.
“As the typical homeowners’ policy does not always cover flooding damage, homeowners should also make sure they are protected from flooding. With the possibility of strong storms this summer, I urge homeowners to review their insurance policies, understand what is covered and contact their insurance agent or broker if they have questions or need to update their policies.”
Superintendent of Financial Services Benjamin Lawsky also noted that people should never take it for granted that they are covered against all possible losses.
Understanding Limitations and Exclusions
Insurance policies contain limitations and exclusions, Lawsky said. “It’s particularly important that homeowners understand how deductibles work. As we continue to study the homeowners’ insurance market in New York’s coastal areas, the department is committed to ensuring homeowners in these areas understand the terms of their policies and take every feasible step to protect their homes.”
Many coastal homeowners are subject to deductibles for particular kinds of events, including damage caused by windstorms and hurricanes. These deductibles are often expressed as a percentage of the home’s insured value, which is usually the cost to rebuild a home, not the cost to purchase it.
For instance, for a home insured for $500,000, a 5 percent windstorm or hurricane deductible would mean that the homeowner is responsible for $25,000, or 5 percent of the value, before the insurer will begin payment. Thus, for example, if the home sustains $75,000 in damage, the homeowner would have to pay for the first $25,000 in damages before the insurer would cover the remaining $50,000.
The amount of the windstorm or hurricane deductible appears on the declarations page of any policy to which it applies.
Homeowners should consider a number of actions to protect themselves in the event of storm losses and make filing claims easier should losses occur:
• Keep copies of all insurance policies, insurance cards and the contact information for the insurance agent, broker or company, in a safe place that is easily accessible in the event of an emergency. Remember to take the information along if there is a need to evacuate home.
• Document the contents of the home by compiling a home inventory that lists information such as the cost and date of purchase of major items. A sample inventory form is available on the Department of Financial Services’ website.
• Buy flood insurance if the homeowner does not already have this coverage. Typically, there’s a 30-day waiting period from date of purchase before the policy goes into effect.
• Take practical steps to minimize potential loss and damage to the home from fire and theft — as well as windstorms — by doing such things as trimming dead or overhanging tree branches, installing storm shutters and dead bolt locks, and equipping the home with a fire extinguisher.
Regulators said renters should also consider how to protect their possessions because their personal property is not covered by their landlords’ insurance policies.
In addition to providing protection for their possessions, many renters’ policies cover the cost of additional living expenses if there is damage to the property and the renter needs to live elsewhere while the property is being repaired.