What Is Hurricane Insurance and Do You Need It?

If you live in a hurricane-prone area, it's a good idea to get enough coverage to pay for completely rebuilding your home. Hurricanes can cause devastating damage, and a standard home insurance policy won't always cover all the damage.

Hurricane wind damage covered by homeowners insurance

A home insurance policy is the first way to protect your home against a hurricane and may be supplemented by flood insurance or windstorm insurance in certain states. A standard home policy covers damage caused by heavy winds. If the heavy winds of a hurricane rip off your siding or shingles, for example, your policy would reimburse you for the damage. Some policies will also have a hurricane deductible.

Coverage for wind damage: Windstorm insurance

In some states like Louisiana, Texas and Florida, companies may require you to buy an extra windstorm insurance policy in addition to your normal home insurance policy. In this case, all wind damage would fall under this policy instead of your traditional homeowners policy. On top of hurricane coverage, you'd also be covered for tornadoes, cyclones and all high-speed wind damage. You will need to talk to your insurer to see if you need a separate windstorm policy.

Hurricane deductibles

In 19 states in certain high-risk areas, you may need to pay a hurricane deductible that's separate from your normal deductible before you can get reimbursed for a hurricane claim. The hurricane deductible is typically between 2% and 5% of what your home is insured for.

Usually, for the deductible to be triggered, the storm has to be a named hurricane and meet certain other conditions, like reaching land. Check your policy documents, or ask your insurance company when you would need to pay for the hurricane deductible.

Just be aware that you may need to pay thousands of dollars out of pocket for your home to be repaired after a hurricane. If you have a high-value home and you're worried about a hurricane, keep the funds for the deductible readily available.

Hurricane and water damage covered by flood insurance

Flood insurance covers one thing: the damage to your home and your possessions caused by an external flood. This means water damage from rain or storms, not a burst pipe.

If a hurricane causes rising floodwater and the water enters your home, flood insurance covers water remediation and repairs. Flood damage is particularly expensive — just an inch of floodwater can cause, on average, $10,000 worth of damage.

Your mortgage lender might require you to have a flood insurance policy if you live in a particularly risky area. For everyone else, the easiest way to determine whether your home is in danger of flooding is by searching for your address to find your flood risk in your community's flood map. Several thousand communities across the country participate in the flood mapping program from the Federal Emergency Management Agency (FEMA).

Flood maps are broken down into several "risk" categories. If you live in an "X" or "A" designated zone, your home is at the highest risk for flooding, so you should get a flood insurance policy. If you are in a "B," "C" or "X" zone, you live in a moderate zone. About 25% of all flood insurance claims come from moderate-risk zones. If a hurricane is likely to hit your area sometime in the next few years and you live in a moderate zone, a flood insurance policy is a good idea.

If you live in an area that has little chance of being flooded, then you can probably skip the flood policy.

Why you need both home and flood insurance for a hurricane

Whether you have just a homeowners policy or both a home and windstorm policy, the coverage will likely not be enough. With a hurricane comes both wind and water, but a windstorm policy will only cover you for wind. Dealing with the insurance company can become a major hassle if the cause of the damage — wind or water — is unclear. To avoid that situation, it’s important to also have a good flood insurance policy.

For example, during Hurricane Sandy in 2012, a home crashed into a neighboring home and destroyed it. The owners of the destroyed home contended that wind blew the neighbor's home into theirs, while the insurer argued it was actually water. Water ended up being the cause, so the homeowner's claim was rejected and they didn't get any money for repairs. This is where flood insurance could have come in handy to pay to replace their home.

How much does hurricane insurance cost?

The average cost of homeowners insurance is about $1,445 per year, while the average cost of flood insurance is $734 per year. Paying for extra windstorm coverage may cost several hundred dollars more, but the amount you ultimately pay depends on the value of your home as well as how close it is to a body of water.

If you live in a high-risk flood area, you may end up spending several thousand dollars on your flood insurance — something to consider before buying a home so close to water. Very valuable homes will also have more expensive home insurance policies, which can also cost several thousand dollars. Just remember, though, that the more valuable the home, the more you have to lose during hurricane season.

Does hurricane insurance protect your car?

Liability coverage, which is required in most states, covers damage to others in a hurricane, such as if wind or water smash your car into a neighbor's house. Collision coverage protects you if you hydroplane into another car.

Comprehensive insurance will pay for the cost of repairs to your car or pay out the value of your car during common hurricane scenarios: