8/9/2019 Are You Prepared for a Hurricane?

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Among our greatest concerns

As insurance advisors, among our greatest concerns is being unable to help clients understand the need to secureimportant protection for risks which we know pose asignificant risk of loss. Representing many clients withmagnificent homes in the metropolitan NY area, the losses wefear the most are those that will be caused by our next big hurricane. The following information is offered to help clientsand prospective clients understand several key hurricaneprotection issues, and to understand the importance of taking action to minimize the costs and inconvenience of losses thatmay arise from our next hurricane.

To begin,it’s not a matter of IF a hurricane will occur

 While we don’t know where, when or exactly what kind of damage to expect, we do know that hurricanes pose thegreatest threat of causing significant damage to homes onLong Island and other parts of Metropolitan NY. Trees crashing onto roofs, rain and debris entering through shatteredwindows, flooding caused by rising surface water and / ordrainage problems, etc., etc, can and WILL cause widespreadproperty damage to many homes in our area, someday .

Prepare now ...for a weather event that is overdue 

If you agree that the threat of damage to your home is adistinct possibility, then consider the importance of taking the

steps now to minimize the impact of a future loss. Each yearas storms form in the south and begin to head towards New York, we receive hundreds of calls to increase insurancecoverage. Please be advised: as storms approach, allinsurance carriers place moratoriums on adding new risks orincreasing existing coverage. Since it is too late to implementpositive changes as the storm approaches, we offer thefollowing suggestions for those who wish to act before the nexthurricane approaches:

1. Know how much you’ll need to pay after a hurricane loss Virtually ALL carriers issue homeowner policies with separatedeductibles for losses caused by hurricanes. We have seenmany policies that apply hurricane deductibles of 5% of thevalue of the dwelling, with some carriers having no “cap” on

 this limit, while others do. An “uncapped” 5% hurricanedeductible, for example, equals a $150,000 out of pocketexpense for someone with a home insured for $3,000,000.Additionally, carriers often define hurricane differently. Thedifferences can be significant, and you should know how theyapply to you. Minimally, you should be aware how your 

coverage will respond to losses caused by a hurricane.

2. Know what is available We have placed coverage forqualifying homes that are located 1 mile or more from theocean with no extra hurricane deductible, and have alsohelped clients to secure a 2% hurricane deductible forqualifying homes

as close as 2,500 feet from the ocean. Generally, qualitycarriers will apply a maximum of $50,000 hurricanedeductible. Again, we’ve seen much higher deductiblesapplied by some large carriers.3. Get a guarantee Place coverage with a carrier that will guarantee the funds to rebuild or replace your home, even i those costs exceed the amount of coverage in place.Especially for custom homes, the costs for skilled labor andmaterial are always significantly higher after a catastrophicloss. The only hedge against post storm building costincreases is a true replacement guarantee, offered by only ahandful of carriers.4.  Expect water damage While the ocean may not enteryour home, homes on the flat terrain of eastern Long Islandwill be especially highly vulnerable to rising ground waterand water intrusion from overloaded drainage systems.Some policies do cover ‘water backup’ from drainagesystems, but damage from rising ground or surface water isnever covered. The best protection is to add a basic floodpolicy to your insurance program, often for as little as $350annually for $250,000 of coverage. Higher limits areavailable, and costs vary by location.5. Cover your windows While it may be impractical toremove large trees that can damage your home, it is notdifficult to prepare temporary storm panels that can beeasily assembled over windows as a storm approaches. Toeliminate the need to install permanent storm shutters ornail plywood over windows, the attached information

identifies a practical alternative that is both effective andeasy to install as a storm approaches.6. Organize your records Often, the greatest inconvenienceafter a hurricane stems from the fact that importantfinancial and household records are destroyed. Click here for a list of tips by the Financial Planning Association thatare helpful in pre-disaster planning.

Other Important Considerations

The financial strength and the claims paying practices of your insurance carrier will become critically important in theaftermath of widespread catastrophic storm damage.Additionally, because the coverage provided by insurance

contracts varies widely, the differences usually becomemost apparent after large losses. As detailed in this New York Times article, coverage such as law and ordinance,functional replacement, loss of use, and debris removal willbecome critically important after a large loss.

For more information on this topic, contact:Timothy P. O’Brien, Director of Private Client Services

COOK, HALL & HYDE, INC.

Offices in East Hampton, Plainview, Bethpage, NY and Fair

Lawn, NJ

Phone: 631-329-7246 or e mail: tobrien@chhins.com