Homeowners in storm-prone areas often prepare for hurricane season by stockpiling bottled water, non-perishable food items, and the gas they’ll need to run their generators. Some may also take pictures of their personal property and gather receipts to prove the value of any damaged items. To be truly prepared, however, homeowners should also review their home insurance policy to ensure they understand the support they’ll receive if windstorm damage makes it necessary for them to file a property insurance claim.
The frequency and intensity of hurricanes have been increasing in recent years, resulting in greater property damage. Consequently, insurance companies have faced an increase in claims, which carry the potential for higher payouts.
To limit their liability, insurers may make adjustments to policies that introduce new coverage limitations and exclusions. Homeowners who fail to note the changes may find themselves with a policy that won’t cover the necessary repairs.
The following are a few key policy issues homeowners should explore as they prepare for a potential claim this hurricane season.
Homeowners’ insurance may not cover mold damage caused by hurricanes
The rain brought by hurricanes often causes residential flooding, which can leave homes inundated with standing water for days. As flood water seeps into walls and other structures, it can lead to mold growth that requires costly repairs and remediation.
Homeowners can easily assume that mold growth resulting from stormwater damage would be covered by their policy. But Ted Patestos, CEO and Founder of Tiger Adjusters, warns that mold coverage is one of the biggest gaps in coverage homeowners may find in their policy.
“Mold coverage is an endorsement attached to your main policy,” Patestos explains. “The main policy provisions typically only cover what is physically damaged by the storm’s wind and water. Mold that develops after a storm, even if it results from storm water, may not be considered ‘storm damage’ and therefore won’t be covered by policies that don’t have mold endorsements.”
Patestos, a seasoned innovator and policyholder advocate in the public adjusting industry, has a long history of promoting tools and strategies that bring greater transparency, efficiency, and value to both policyholders and adjusters. He has developed training systems and forward-thinking technologies that reduce friction in the claims process.
Tiger Adjusters, which Patestos launched in 2023, is known for its commitment to consumer advocacy and raising insurance industry standards. Its work has recovered millions of dollars in settlements on behalf of clients across the country.
“Policies that have mold coverage gaps can cause huge headaches for policyholders when their home is damaged,” Patestos adds. “Mold introduced by a storm can spread during the weeks homeowners often must wait for mold mitigation companies to come and remove wet materials. Even when initial damage is covered, the additional damage from mold that spreads to areas not directly impacted by the storm may not be.”
Deductibles may be higher for a hurricane-related insurance claim
Insurance policies typically include a deductible that homeowners must pay out of pocket before coverage takes effect when they file a claim. In the case of damage caused by a hurricane, policies often stipulate a separate deductible that can be much higher than the one applied to standard losses.
“In areas prone to those storms, it’s not unusual to see a percentage as the deductible, so a consumer will see 1%, 2% or even 5% sometimes,” Patestos recently said in an interview with Guardian Service. “That means if you have a 400k house, your deductible could be 20k. Once the carrier applies depreciation, you could be in a situation where you sustain 30k in damage and receive nothing. The tragedy of that is [that] at that point, you are responsible for the repairs in order to keep your insurance (whether you received a payment or not).”
Patestos also points out that homeowners who fail to make the repairs for which they are financially responsible face the risk of having their policy canceled. Reviewing the “duty to maintain” information in homeowners’ policies can help policyholders understand how quickly they’ll need to complete repairs needed due to damage that their policy does not cover.
Roof surface endorsements may affect those who file a claim
As homeowners inspect their policies for recent changes, “roof surface endorsements” are one element they should look for. These endorsements insert a schedule of values into the policy, limiting the responsibility carriers have for roof replacement costs. The older the roof is, the less the policy pays.
“Imagine a situation in which you have a $400,000 house with a big roof that costs $60,000 to replace,” Patestos says. “If the roof is 10 years old, the carrier may only cover 60 percent of the replacement cost, which would only cover $36,000. When the 5 percent deductible is applied, the covered amount drops to $16,000.”
Determining the likely repair cost and how much the policy covers if the property is damaged or destroyed will help homeowners be better prepared for the possible. Even when the cost of repair is covered, homeowners should prepare for additional living expenses associated with securing temporary housing until the repairs are complete or temporary repairs can be made.
To be fully prepared for hurricane season, policyholders should take steps to fully understand their coverage well before they need to file a homeowners claim. Those who don’t may find that their homeowners insurance policy has caveats that will keep them from getting the help they need to repair or replace key components of their home.
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