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Wednesday, May 7, 2014

Explaining Windstorm Insurance and Wind Mitigation for Inquiring Minds

Sometimes different types of windstorms, such as hurricanes and tornadoes, are not covered in standard homeowners' insurance policies. Those who live in areas susceptible to this type of peril must purchase separate coverage in order to protect themselves or be exposed to much higher deductible options. Residents of coastal states (and some midwestern states where tornadoes are common) fall into this category.

Windstorm insurance is a specific type of property-casualty insurance that protects policyholders from property damage caused by windstorms (and sometimes specifically named storms or hurricanes).  Some homeowner insurance policies provide limited coverage for wind and hail damage, or require that a higher deductible be specifically identified for these named perils. Most states with risk of loss from these perils have government mandated insurance plans that make the necessary coverage available to property owners who are unable to obtain insurance through the voluntary market. There may also be excess and surplus lines carriers in your area who will cover the wind-only peril.

While tornadoes may not be specifically mentioned as a covered form of loss, tornado losses are one event covered typically covered under the broader term windstorm. Windstorm includes tornadoes, straight-line winds and hurricanes.

Windstorms are damaging to a home for several reasons. The incredibly strong winds assault your home using a number of forces. Strong winds create uplifting, shearing and lateral forces that can cause massive destruction to a home. Often times they will also destroy windows and doors, allowing water to enter the structure which could cause severe damage to the interior of a home. The high winds can also blow debris onto and into the home, further destroying the property. Worst of all, in the event of a breach of the home's outer shell, the high powered winds can cause the roof to lift up as the combination of forces at play wreak havoc on an unprotected structure.

If you live in an area that requires separate windstorm insurance, you are well aware of the rising insurance premiums we all pay to insure our homes from wind damage. In order to mitigate this expense, an effective tactic for reducing your premium is to consider wind mitigation enhancements to your home. With wind mitigation, your premiums may be reduced by almost half!  

There may be grants available in your area to retrofit your home to quality for the wind mitigation credits.  To determine if you qualify, a certified inspector will come to your property and look for key features of your home that show that it will be less likely to be damaged during a strong wind storm or a hurricane. Features such as concrete block construction, the presence of gable end bracing, a hip roof, the presence of a single or double roof straps, the presence of a secondary water resistance barrier, or shutter and opening protection will all qualify a home for wind mitigation certification. This allows the inspector to give your home a certificate stating that it is better equipped to endure such an event and because these types of structures suffer less wind damage, the insurers are willing to lower their fees. You could even qualify for a refund check from your insurer once you have had your home inspected.  There is typically a non-refundable fee for the inspection.

You may recall our previous blog regarding your dwelling coverage options of "Actual Cash Value" v/s "Replacement Cost Value". When purchasing separate policies to cover the same dwelling (ie; dwelling insurance, flood insurance and windstorm insurance), it is recommended (and sometimes required) that you carry the same amount of coverage on each policy. Some consumers feel that they can cover their home for less on certain policies under the notion that one peril can cause more damage than another. Remember that a loss will be settled based on either a replacement cost or actual cash value basis, and you should ensure that your coverage levels are adequate to avoid a penalty on a claim settlement.  You will want to discuss this with your Trusted Choice Agent.

Replacement cost is not the market value of your home, nor is it the tax-assessed value. It is the cost to replace the damaged property, with no reduction for depreciation of the damaged property. Actual cash value is the cost to replace the damaged property reduced by an allowance for depreciation. In order to qualify for replacement cost coverage you will be required to insure your property to at least 80% of the replacement cost. As long as this requirement is met, and if you have a total loss, your insurance policy will cover the cost of replacing your home up to the coverage limits included on your policy. Further, if the property is not insured to at least the 80% value, then the payment for partial losses may be reduced.

Most importantly, as your Trusted Choice Insurance Agent, SouthGroup Insurance Gulf Coast wants you to know you can call on us with your questions or concerns seeking more helpful advice or answers to your pressing insurance questions. A full insurance review is always your best bet to make sure you have all of the adequate coverage for your personal insurance needs. Remember, we offer a personalized insurance review to anyone who is interested at no charge – just visit any one of our 3 convenient coastal locations!

We are your LOCAL
Trusted Choice Advisors, SouthGroup-Gulf Coast ,  SALES AND SERVICE AGENTS: Angelyn Treutel Zeringue, Tammy Garfield, Tammy Hogue, Brittany Jones, Denise Russell, Melissa Moran, Alex Treutel, Susan Monti, Anne Gillam, Ashlie Moody, Michael Reso, Mark Strickland, and Whitney Zimmerman at SouthGroup Gulf Coast. You can reach us by snail-mail or in person: 412 Hwy 90, Suite 6, Bay St Louis MS 39520, email: , phone: 228-466-4498  fax:888-415-8922,  FaceBook, or Twitter !

We have 3 Gulf Coast locations to serve you - 2505 Pass Road - Biloxi, 5400 Indian Hill-Diamondhead, and 412 Hwy 90 Ste 6-Bay Saint Louis, MS. We write coverage in 40 different states and can assist you with Mississippi insurance, Louisiana insurance, and Alabama insurance and many other states. Insurance is stressful, but we make saving easy.  We help you save money on insurance!

Thanks to Susan Monti for her words of wisdom!

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