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Homeowners Insurance – Know Your Options For Hurricanes, Tornadoes, and Flooding
What you'll learn: Are tornadoes covered? What is hurricane insurance? Do I need flood insurance?
EXPECTED READ TIME: 4 MINUTES
February 24, 2023
Homeowners insurance can help you rest easy knowing your home and possessions are protected from damage and loss, so long as you have the right coverage. But with so many different policy types, add-ons, and exclusions, how do you know if your assets are covered if a disaster strikes? From windstorms to flood insurance, here’s what you need to know.
What is covered in a basic homeowners insurance policy?
According to Allstate, typical homeowners insurance policies cover damage caused by fires, lightning strikes, windstorms, and hail. Most include coverage for the dwelling itself as well as structures attached (such as a garage or deck), other structures on the property, your personal belongings inside, and liability for injuries that occur on the property.
The actual amount of coverage is subject to limits within each policy, and homeowners usually have to meet a deductible before insurance kicks in.
What does homeowners insurance not cover?
A standard policy does not offer protection from all types of natural disasters, sometimes called “acts of God,” including floods and earthquakes. Valuable artwork, jewelry, and collectibles typically also require additional coverage.
- Tip: It’s recommended to buy enough coverage to replace your home and its contents, even if that means going above and beyond a basic policy.
Does homeowners insurance cover tornado damage?
According to American Family Insurance, tornadoes don’t usually require extra coverage because they’re classified as windstorms. A basic policy usually includes coverage from tornado-induced wind, hail, rain, fallen trees, food spoilage if the power goes out, and even expenses incurred at a hotel if you’re displaced from your home.
An important caveat is if a tornado leads to flooding. To be covered from flood damage, you must purchase a separate flood insurance policy (more on that soon).
- Tip: If you live in a tornado-prone area, such as Texas, Kansas, or Oklahoma, make sure your limits are high enough to cover rebuilding your home and replacing lost valuables.
Does homeowners insurance cover hurricane damage?
How do you protect your coastal oasis from harm? It’s important to know there’s no such thing as official hurricane insurance. Instead, protection from hurricanes typically comes in the form of extra wind and flood insurance.
Nineteen states, including New York and Virginia, as well as the District of Columbia, require a separate hurricane deductible that you would have to pay before insurance kicks in. Rather than a dollar amount, this is a percentage of a home’s insured value (usually one to 5 percent).
- Tip: If your home could be in the path of a hurricane, ensure you have sufficient wind and flood insurance (these are separate) before a storm starts brewing.
Does homeowners insurance cover floods?
Most home insurance policies do not cover damage from flooding. That’s important to know, because flooding has a long list of potential causes, including prolonged rainfall from hurricanes and tornadoes, overflow from a nearby river, melting snow, and even neighborhood construction. Flood insurance can be purchased through the National Flood Insurance Program (NFIP) which is managed federally by FEMA or through a private carrier.
Do I need flood insurance? Some households are required to purchase flood insurance. Insurance agents and lenders use flood maps to determine property flood risks and policy costs.
- Tip: Request a flood map to learn your property’s flood zone rating, so you can understand your property’s flood risk and help decide if you should purchase flood insurance. Remember that flooding is possible anywhere, even in low-risk areas.
If you live in a high flood risk area, a certificate of elevation may be required to further assess your flood risk and determine flood insurance premium.
What else should I think about?
This is just the tip of the iceberg when it comes to protecting your investment. Depending on where you live, you may want to explore other possible threats such as earthquake insurance or wildfire insurance.
Your insurer will likely recommend how much coverage is necessary, but consider doing your own due diligence as well. When determining how much coverage to have in place, consider these factors:
- What are the local construction costs in your area?
- What is the square footage, style, and special features of your home?
- What other structures are on the property that need protecting?
- Do you have an inventory of your personal possessions, especially those of high value?
- Is more coverage necessary to account for inflation and cost of labor and materials after a major catastrophe?
It’s never fun to think about the worst case scenario, especially when your largest asset is involved. The upfront effort can bring peace of mind today and relief if something happens down the road.
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Disclosures
1Conventional Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.0 discount point, which equals 1.0 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
2FHA Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.0 discount point, which equals 1.0 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 96.5%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
3VA Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.125 discount point, which equals 1.125 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $450,000; loan-to-value ratio of 95%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of $995.
4Jumbo Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 0.625 discount point, which equals 0.625 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, non-conforming, fixed-rate loan. Loan amount of $1,009,000; loan-to-value ratio of 70%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Advance Period. During your Advance Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.
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