After an unprecedented hurricane season last year and experts predicting the formation of more than 13 named Atlantic storms this season, Florida’s Chief Financial Officer Tom Gallagher is issuing a warning to consumers: Prepare now. The official start of hurricane season is June 1 and it ends Nov. 30.
“Last year’s storms were a powerful reminder that homeowners need comprehensive insurance coverage, including flood coverage,” said Gallagher, whose agency worked with tens of thousands of homeowners devastated by losses. “Review your insurance coverage and make sure it’s adequate so you can protect what you’ve worked so hard to build.”
Nearly 1.7 million insurance claims, representing $21 billion in losses, were filed after four hurricanes inflicted damage in 54 of Florida’s 67 counties last year.
Gallagher also advised Floridians to take steps to strengthen their homes to better protect their families and properties and reduce the level of catastrophic losses. “It pays to better protect your home from a hurricane,” Gallagher said. He also suggested following these storm preparation tips:
• Don’t wait until the last minute to buy coverage. If you’re covered, carefully review your policy, especially its “declarations” page. Upgrade your policy limits if they do not cover the current value of your home and its contents.
• Know whether your policy pays the “replacement cost” or “actual cash value” for a covered loss. Gallagher said many 2004 storm victims were shocked to learn that “actual cash value” rarely paid enough to replace a destroyed item at today’s prices.
• Be sure you know what your deductible is for hurricane losses. Most policies now have a hurricane deductible of two to five percent of a home’s insured value. Legislation passed in the 2005 session now allows insurers to offer a 10 percent deductible. Gallagher said many hit by last year’s storms were caught off guard financially and unaware that the deductible was based on the structure’s insured value instead of the estimated hurricane damage costs.
• Consider your law and ordinance coverage. Many insurers offer a rider for 25 percent law and ordinance coverage that helps pay for rebuilding an older home to meet modern building codes. Legislation recently passed now requires insurance companies to offer riders for up to 50 percent law and ordinance coverage.
• Inventory your household items, including receipts, purchase dates and serial numbers. Photograph or video-tape your possessions. Keep copies of this information and your insurance policies in a safe place and keep the originals in a safe deposit box.
• Write down the name, address and claims-reporting telephone number of your insurance company, which may differ from your agent’s contact information. Keep this information in a safe place and make sure you have access to it if you are forced to evacuate your home.
• When a hurricane threatens, take action to protect your property. Buy the materials you need to secure your property and minimize your losses. Cover your windows with shutters, siding or plywood. Move vehicles into a garage or carport when possible.
• Remember to withdraw money BEFORE a pending natural disaster. Normally financial institutions will be closed at least two days after a direct hit and ATMs could be out of commission even longer.
• Keep materials such as plywood and plastic on hand in case you need to make temporary repairs after a storm. Repairs made to prevent further damage to property are reimbursable by your insurance company as long as you keep all receipts.
Gallagher also alerted Floridians that legislation recently passed prohibits insurance companies from non-renewing homeowners’ policies until 90 days after hurricane repairs are completed and requires insurers to pay replacement costs up front on a storm claim rather than holding back money until repairs are completed or replacement contents are purchased.
Gallagher said that homeowners can also look forward to insurance companies offering plain language policies, including clear financial disclosures, and a checklist that will detail what is and what is not covered.
Representatives from the Department of Financial Services (DFS), which Gallagher oversees, will be participating in several Hurricane Preparedness Expos around the state throughout the hurricane season. Consumer guides, tips and other useful information will be available from the department and other organizations concerned with hurricane safety.
To find out about a Hurricane Preparedness Expo in your area or to request a free guide on “Insuring Your Home,” or a brochure on “Natural Disasters,” visit www.fldfs.com. Consumers may also call the department’s toll-free Consumer Helpline at 1-800-342-2762, Monday-Friday from 8 a.m. to 5 p.m.
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