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Having your home
wrecked by a
hurricane is
gut-wrenching.
Finding out your
home insurance
doesn't cover much
of the damage can
prove financially
crippling.
Hurricane Ivan blew
out the front door
of Don and Lois
Muller's
three-bedroom home
in Gulf Breeze last
year. Soon the storm
surge poured into
the home, about 300
feet from the beach,
flooding it with
three feet of water.
"We lost
everything in the
house," Don, 79,
said.
To make matters
worse, the Mullers
-- transplants from
New Hampshire --
didn't think they
needed flood
insurance. Their
insurance agent
didn't push the need
for flood coverage,
either.
Structural damage
and ruined
possessions
ultimately cost the
Mullers about
$330,000, much of it
in water damage.
The insurance
company initially
offered to pay about
$2,700 in claims,
eventually
increasing the
payout to nearly
$20,000. The Mullers
continue to pressure
their insurance
company to pay for
more of the damage.
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Homeowners
Typically covers
wind and fire damage
and protects against
theft. The insurance
also generally
protects against
damage to swimming
pools, detached
garages and storage
sheds.
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The major point
of contention? While
the wind blew out
the doors and let in
the water, Don
Muller said the
insurance company
characterized it as
flood damage rather
than wind damage.
Every year
thousands of
Floridians find out
too late they were
undercovered or
didn't have the
right types of
coverage to recoup
all their losses
from
hurricane-related
damage.
Beyond wind damage
While most people
associate hurricanes
with wind damage, it
is the rain-related
flooding that wreaks
major havoc,
insurance experts
say.
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Flood
Protects against
damage from storm
surge, rising water
and accumulation of
rain water. Coverage
is excluded under
homeowners policies
and many commercial
property policies.
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But, typical
homeowners insurance
doesn't cover flood
damage, which
includes damage from
storm surge, rising
water and
accumulation of rain
water.
While mortgage
lenders typically
don't require
homeowners who live
outside a flood zone
to get flood
insurance, Mark
Goldwich, public
adjuster with
Jacksonville-based
Gold Star Adjusters,
recommends getting
it anyway.
"As a lot of
people are finding
out now, if you live
in Florida you're in
a flood zone," said
Goldwich. "I can't
tell you how many
people in the
Panhandle got
substantial flood
damage [from Ivan
last year] and had
no flood coverage."
While homeowners
in Central Florida
might not need flood
insurance, in
Jacksonville, "if
you're close to the
Intracoastal or the
ocean or even the
river, I would have
flood insurance,"
Goldwich said.
Homeowners
insurance typically
covers wind and fire
damage, and protects
against theft, said
Craig Dewhurst, a
State Farm insurance
agent.
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Ordinance or law
Damaged homes,
especially older
ones, that are
rebuilt must be done
so to meet current
building codes. This
insurance helps pay
for the additional
expense of meeting
new codes.
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When buying a
homeowners insurance
policy, Dewhurst
advises people to
buy enough coverage
to pay for 100
percent of the
home's rebuilding
costs.
Homeowners should
also ensure their
policy covers the
cost of rebuilding
the home at current
rates, Goldwich
said.
"There are still
a lot of policies
that only provide
for the replacement
cost, less
depreciation," he
said. "You will not
be able to fix the
home for what they
give you."
Not all
homeowners policies
cover wind damage
either. In high-risk
areas such as
oceanfront property,
homeowners policies
might not include
wind coverage.
"If you live east
of I-95 or A1A you
may not be able to
get wind insurance
through a private
carrier," Goldwich
said.
In such cases,
residents can get
coverage from
Citizens Property
Insurance Corp., the
private-insurer of
last resort.
Citizens by law must
charge the highest
premium in each
county.
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ANNUAL PREMIUMS
Policy cost
comparisons
Premiums on
homeowners policies
vary by region.
Here's a sampling of
annual premiums for
a $200,000
frame-home built in
2000 without an
alarm system, a
$1,000 deductible
and a $100,000
liability.
Beaches -- $1,190
Mandarin/Southside
-- $916
Clay County --
$773
St. Johns County
-- $996
Premiums for a
flood policy for the
same home located in
a preferred flood
zone in each of the
four areas would
cost $296 annually.
Source: Craig
Dewhurst, State Farm
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Lessons learned
Pay attention to
deductibles,
industry experts
warn.
A 2 percent wind
deductible, for
instance, applies to
the amount the home
is insured for and
not the actual
claim, said Jeff
Grady, president and
CEO of the Florida
Association of
Insurance Agents,
which represents
more than 1,300
independent agencies
statewide.
"So if you had a
$5,000 claim with a
2 percent deductible
on a $200,000 home,
you had a $4,000
deductible before
anything is paid
for," Grady said.
"People need to be
concerned and
careful about how
much they take on
vs. how much they
are leaving to have
the insurance
company pay for."
Just as drivers
receive discounts on
auto insurance for
having airbags or
car alarms,
homeowners can
receive savings on
their policies by
strapping down the
roof, attaching
braces on garage
doors and installing
hurricane shutters.
"If you've done
things to mitigate
the exposure of a
hurricane to your
property," Grady
said, "you can
qualify for
hurricane mitigation
discounts with
almost all
homeowners insurance
companies that write
in Florida."
In retrospect,
Don Muller wishes he
had flood insurance
and advises others
to get the coverage,
just in case.
"Apparently a
hurricane is a flood
nowadays," he
quipped, "and we're
probably going to
have more hurricanes
and they'll evaluate
'em as a flood." |