Hurricane season is underway, with Tropical Storm Erin likely becoming the first hurricane of the Atlantic season. Insurers are struggling with increased risks from climate-related events, leading to limited coverage options as major insurers exit high-risk states. Homeowners need to understand that typical policies cover wind damage but not flood damage caused by storm surges, necessitating separate flood insurance. Timing for acquiring hurricane insurance is important, as binding restrictions may arise during storms. If private insurance options are limited, state-run pools can provide alternatives, though coverage may be restricted.
Insurers are facing challenges with increased risks from climate-related disasters, leading to limited coverage options for consumers as some major insurers withdraw from high-risk states.
Homeowners insurance policies usually cover wind damage but not flood damage from storm surge, necessitating a separate flood insurance policy.
Timing is crucial for obtaining hurricane coverage, with insurance companies often imposing binding restrictions during storms, making mid-season applications more expensive or limited.
If traditional insurance is not an option, state-run insurance pools like Citizens in Florida or the FAIR plan in California can provide coverage when private insurers are scarce, though coverage options may be limited.
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