Hurricane Isaac managed to get the attention of citizens in Florida, Georgia, Alabama, Mississippi and Louisiana as this very slow moving storm crossed the Gulf. The Midwest is also on alert for heavy rain as Isaac moves north and becomes a tropical depression. The northern track shows heavy rain up to and including Ohio and Minnesota.
Here are what homeowners, renters, vehicle owners and boat owners face as a result of “only” a Category I storm: Some southern Louisiana homeowners saw water up to their rooflines. Reporters were standing in waist-deep water to do their video reports. Other reporters were hardly able to keep their balance at the height of the hurricane winds.
While evacuations were ordered on the Gulf coast, many decided not to go, as usual, which often creates problems for law enforcement and emergency responders, not to mention the danger those individuals and their families may encounter when conditions are so bad. As the storm moves on through, the focus is quickly shifting to dealing with property and vehicle damage from high winds, flooding, and related issues. Law enforcement, emergency services, insurers and the not-so thoughtful rip-off artists charging exorbitant fees for tree removal, roof repair and general contracting restoration work will be on the scene as soon as humanly possible.
According to the Insurance Information Institute (I.I.I.), wind damage from both tropical storms and hurricanes is covered under standard homeowners and renters insurance policies. This includes damage to both the structure of the home and personal possessions. Ninety-seven percent of homeowners have homeowners insurance but only 29 percent of renters have renters insurance. Gulf coast residents likely have higher homeowner deductibles due to the increased risk of such storms.
Flood damage is generally NOT covered under standard homeowners and renters insurance policies. A separate flood insurance policy can cover losses resulting from heavy or prolonged rain, coastal storm surge and failure of levees or dams, notes the I.I.I. The National Flood Insurance Program (NFIP) provides coverage for up to $250,000 for the structure of the home and $100,000 for personal possessions. Excess flood insurance is also available from some private insurers if additional insurance protection is needed over and above the basic NFIP policy.
While flood insurance for homeowners and renters is available, only 13 percent of Americans nationwide purchase this coverage, according to a survey by the I.I.I. The number of flood insurance policies increased in Louisiana and Mississippi after 2005’s Hurricane Katrina but then declined in subsequent years while the number of flood insurance policies rose in Alabama post-Katrina and continued to rise over the following years.
Renters — whether in apartments, condos, townhomes or single family housing — often don’t know that the owner of the property is responsible for the building, but the renter is responsible for personal belongings and liability that may occur within the rented unit (that includes theft!). Renters insurance is very inexpensive compared to the owner’s insurance since there is no building involved.
Damage to cars from wind and flooding is covered under the optional comprehensive portion of an auto insurance policy. More than 75 percent of all Americans choose to purchase comprehensive auto insurance coverage.
As in all disasters, the financial impact to property and individuals will be the next important issue on which to focus.
David Colmans is the executive director of the Georgia Insurance Information Service. Contact him at 770-565-3806 or by email at firstname.lastname@example.org.