When Hurricane Michael barreled through the Florida Panhandle, it left a path of destruction and a lingering question for homeowners across the country—were they truly covered?
Many people felt confident in their homeowners insurance, and Consumer Reports data supported that confidence. In a recent survey of over 85,000 members, most respondents said they were satisfied with their insurance carriers. Top-rated companies like USAA, Amica, Erie, MetLife, and Auto-Owners consistently received high marks for service.
But high satisfaction can sometimes hide blind spots. You might be overpaying, underinsured, or unprepared for certain risks without even knowing it. Before the next disaster strikes, here's what to check.
Are You Paying Too Much?
Unlike auto insurance, homeowners policies don't change dramatically in price between companies, but the difference can still be hundreds or even over $1,000 a year. If you've been with the same carrier for years, it may be time to compare.
Take action by getting quotes from top-rated insurers, and consider using an independent agent who can shop across multiple providers. You can find one at TrustedChoice.com, a directory maintained by a national agent association. Also explore direct-to-consumer companies like Amica or USAA, which consistently earn high marks.
Check Your Actual Coverage
Has your home value gone up? More importantly, have labor and construction costs increased in your area? If so, your current policy limits might not be enough to fully rebuild after a disaster.
You also need to consider specific gaps. For instance, most standard policies don't cover flood damage or earthquakes, and they may have restrictions on windstorm or hurricane coverage in high-risk areas. Even your dog's breed could limit liability coverage.
Take action by upgrading to extended replacement-cost coverage. This option covers up to 25 percent beyond the listed dwelling limit, especially helpful after disasters when labor and material costs spike.
Also, protect valuables like electronics, sports equipment, and tools with policy endorsements. Jewelry and fine art should be insured through a separate "floater" policy with no deductible and full-value protection. And if you run a business from home, get a commercial add-on. Your laptop and printer might not be fully covered otherwise.
Do You Have Flood Insurance?
Homeowners insurance does not cover flooding from outside the home, whether from storm surges, heavy rains, or poor drainage. You need separate flood insurance, usually through the National Flood Insurance Program (NFIP), which is federally backed.
The cost can be as little as a few hundred dollars a year for those outside high-risk zones. And it's worth noting that more than 20 percent of all NFIP claims come from low or moderate-risk areas.
Unfortunately, NFIP policies require a 30-day waiting period, so for homeowners and renters in the Florida Panhandle, buying flood insurance after Hurricane Michael was too late for that storm. But it is not too late to prepare for the next.
Renters, Don't Skip This
If you rent, your landlord's policy does not cover your personal belongings. That includes clothes, furniture, electronics, and anything else you brought with you.
Take action by purchasing renters insurance—it typically costs just $12 to $20 a month and includes liability coverage. As with homeowners policies, renters insurance does not cover floods or earthquakes, so be sure to add that separately if you live in a risk zone.
Your Credit Score Affects Your Premium
In most states, insurers use something called a credit-based insurance score to set your premium. It is not the same as your FICO score, but it still factors in your credit history. A low score could result in much higher premiums.
Take action by asking for your insurance score and reviewing it. Improving your credit, paying bills on time, and correcting report errors can all help. If you've had a major life event like a medical crisis or the death of a spouse, ask for an "extraordinary life circumstances exception." Some states require insurers to consider that.
Beware the Hail Damage Trap
While most policies cover hail, some insurers have started excluding cosmetic damage—like dented siding that's still functional. Others require percentage-based deductibles that can cost thousands before coverage kicks in.
Take action by requesting a fixed-dollar deductible instead of a percentage. And if you live in a hail-prone area, ask for an endorsement that includes cosmetic coverage so your whole house can be re-sided even if just one or two walls are damaged.
Final Word: Don't Wait for the Next Storm
Peace of mind starts with knowing what your policy really covers. The time to review it is before the winds pick up again. Whether you're a homeowner or renter, whether you live in a floodplain or just near one, taking these steps now could save you a fortune—and a whole lot of stress—later.
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