Hurricane Florence: An Insurance Perspective

As an insurance agent of 42 years, I have often wondered when I have seen imagery like devastation from Hurricane Florence if the individuals who were rescued from the rooftops of their homes or ferried away by the National Guard ever thought, “Just think, I saved 15% on my insurance,” or “I could have saved $$$ if I would have switched insurance.” Suddenly the selling jangle doesn’t seem so relevant anymore. What does become the focal point are the thoughts of, “Am I properly insured for the damage being done to my home, my personal belongings, and my vehicles? Is the company I am insured with have enough solvency to handle my claim? Where and how do I even get started to obtain help and reimbursement?”

Those 42 years of experience have also borne out the validity of the statement, you will never know how good your insurance is until the moment after you need it. It is a true statement that you cannot order up a parachute while the plane is coming down–and so it is with insurance–you cannot purchase it once you need it.

How will insurance companies respond to this natural disaster?

They will have already moved assets into the area so they can immediately set up claim centers where people can submit their claim. Most insurance companies take great pride in striving to be first on the scene. They do not want the negative publicity associated with slow or cumbersome claim handling.

 The immediate and pressing priority is the safety of all parties concerned. Most insurance policies have a provision for additional living expenses. Usually, the adjuster will make arrangements to pay for motel accommodations, eating arrangements, and some upfront money to purchase clothing in the event you were not able to bring any change of clothing with you; also, some reimbursement for additional travel expenses associated with having to travel further to work.

The  peril of wind can be addressed by the claims adjuster with some ease because the damage is going to be easily identifiable. Greater difficulty is related to water damage. No Regular homeowner policy provides any coverage for damage by flood. (For definition of flood  and other terms used by NFIP refer to our article “The National Flood Insurance Program: NFIP.”)

If there is deemed to be water damage from wind driven rain due to structural failure, then the water damage may be compensated; otherwise, you are on your own dime.

Most outbuildings or additional structures on the affected property will be treated to same coverage as provided on the main dwelling.

Landscaping is not insurable, so this will be a complete loss expense on the shoulder of the homeowner.

If a farmer loses his crop to flood and has a policy through NFIP or another private flood carrier, he will be eligible to receive fair compensation.

It is estimated that less than 20% to 30% of Hurricane Florence affected households are covered by flood insurance. When the governor declared this as a natural disaster area, it allowed affected households to be able to get low interest loans to help with their recovery. These loans are required to be paid back, so many will feel the economic impact of this storm for a long time into the future.

Vehicles are subject to losses caused by the perils of collision and comprehensive, so if a vehicle is damaged by colliding with another object, the collision deductible will be applied, with the insurance company picking up the difference. If a vehicle is swept away by water, the comprehensive deductible will be applied, and the insured and the insurer will have to negotiate market value in order to close the claim. The insured may owe more than the vehicle is worth, so they will end up paying for something they do not have possession of any longer. It may be interesting to call your lending institution and see what they would do in the above scenario.

Of course the greatest loss associated with such a disaster is the cost of human life. All the other losses can be replaced, but the loss of a loved one will bear emotional scars for the lifetime of the family of the deceased. To those who suffer this ultimate loss, may I just say though I am not asked to walk in your shoes I will try to understand somewhat the depth of your sorrow and loss. May you find a power beyond your own to help you endure. God be willing.