Hurricane Insurance Guide: Coverages, Costs, and Claims (2023)

Homeowners insurance is one of the best ways to protect your investment in your home. In the event of an unexpected human-made or natural disaster, the policy pays the cost of replacing or repairing your home and belongings.

But even the most comprehensive homeowners insurance policy doesn’t cover damage from flooding, and it might not cover wind damage, either. For that, you’ll need hurricane insurance, which is add-on coverage that protects against the various perils that commonly result from hurricanes.

What is hurricane insurance?

Hurricane insurance isn’t a single policy type; rather, it’s an add-on to your existing homeowners insurance or a type of policy that expands on the coverage your homeowners insurance provides and fills any gaps in coverage.

While homeowners insurance usually covers some types of damage a hurricane might cause to your home and belongings, it often has higher deductibles for them.^[1] Your policy might exclude certain damages entirely.

Flooding is a good example. Your homeowners insurance won’t cover it: If you want coverage, you’ll need to purchase separate flood insurance, either from the National Flood Insurance Program (NFIP) or a private insurer. Because hurricanes frequently cause flooding, flood insurance is an important type of policy to include if you want hurricane flood damage to be covered.

Wind is another frequent cause of hurricane damage, but some homeowners policies exclude wind damage caused by hurricanes. If yours is one of them, and you live in a hurricane-prone area, you might want to add a windstorm policy to your standard coverage.

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How policies cover perils

Home insurance protects you from perils, which are events that can damage or destroy your home and personal property. Home insurance policies fall into one of two categories: named-peril policies and open, or all-perils, policies.

Named-peril policies are the more restrictive of the two. They cover only the specific perils named in the policy. Common named perils in a standard homeowners insurance policy include fire, lightning, hail, wind, and theft. Flood insurance and windstorm insurance are also named-peril policies.

Open-peril policies are broader. They include all perils that aren’t specifically excluded from coverage. Special-form (or HO-3) homeowners insurance policies, which are the most popular type, have open-perils coverage for dwelling and other structures. Personal property is named-peril coverage under an HO-3 policy. Common exclusions on an open-peril policy include damage from floods and earthquakes.^[2]

What does hurricane insurance cover?

Hurricane insurance covers losses due to perils resulting from a hurricane:

• Wind damage: Hurricanes produce winds that blow 74 miles per hour or more, which can damage your home and other structures on your property, or even destroy them outright.^[3] Standard homeowners insurance policies, including named-peril policies, typically cover wind damage, but they might charge a separate deductible or even exclude coverage when the wind results from a hurricane or other named storm. Windstorm insurance fills that gap when included in the group of policies that make up your hurricane insurance.

• Flood damage: Flooding is the most dangerous peril associated with hurricanes, and it can occur inland as well as along the coast. The National Flood Insurance Program offered through the Federal Emergency Management Agency (FEMA) is the primary provider of flood insurance policies in the U.S. It’s available to everyone who lives in one of the 23,000 communities that participate in the NFIP, but coverage typically doesn’t go into effect until 30 days after you purchase it — that means you’ll want to purchase it well in advance of hurricane season.

• Storm surge: An approaching hurricane can push sea levels as high as 20 to 30 feet as the storm makes its way toward land, according to the Center for Science Education. The resulting surge of water can overwhelm the shoreline in coastal states, destroying homes and other structures — especially when it occurs at high tide. Storm surges are floods, so standard homeowners insurance won’t cover them. Flood insurance does, however.

Hurricane insurance protects against wind, flooding, and storm surge by compensating you for the following losses:^[4]

• Structural damage: Hurricane insurance covers the cost of repairing or rebuilding your home if it’s damaged or destroyed by wind, storm surge, or other flooding. Other structures on your property, such as a detached garage or shed, should also be covered.

• Personal property: This includes the belongings you keep on your property or store elsewhere. Policies usually limit coverage to a percentage of the coverage you have on structures.

• Additional living expenses: These are the costs you incur when your house is destroyed or damaged so severely that you can’t live there while it’s being repaired. These costs might include meals, lodging, and laundry services.

• Business interruption: This covers business expenses and lost income if you have to close your business temporarily because of a hurricane or other covered peril. It can also reimburse extra expenses you incur to keep your business open, such as the cost of renting a temporary space, buying equipment, or hiring extra staff.^[5]

Learn More: What is Hazard Insurance?

What factors affect hurricane insurance premiums?

Hurricane insurance premiums are based on insurers’ assessments of how likely you are to file a claim. Insurers base their assessments on these risk factors:

• Location of the property: Homes located in a flood zone or near water — especially those along the coasts — cost more to insure. Insurance companies also look at location in terms of construction costs and proximity to emergency services. The more expensive it is to build homes in your area, and the farther your home is from a fire hydrant or fire department, the higher your rate is likely to be.

• Property value: High-value properties cost more to rebuild, so they also cost more to insure.

• Age of the home: Older homes can be more expensive to insure because of the added expense of replacing obsolete features and materials. These homes can be difficult to insure for full replacement value, according to the Insurance Information Institute.

• Building materials: Homes constructed with expensive building materials and upgrades cost more to rebuild, so they also cost more to insure.

• Policy deductibles: Deductibles affect how much an insurer has to pay out if you file a claim, so you’ll typically pay less for coverage if you have a higher deductible.

• Claims history: Insurers use prior claims history — the owner’s and the home’s — to forecast the likelihood of future claims. Filling frequent claims could affect your premiums.

How much does hurricane insurance cost?

Hurricane insurance averages $2,555 per year, according to HouseLogic, but there’s no single average premium for hurricane insurance because so many different factors determine the cost. You can get a general sense of how much you might pay by looking at average premiums for the types of insurance policies that protect you against losses from hurricanes.

• Homeowners insurance: Homeowners insurance — which doesn’t cover flooding and may not cover wind damage from a named storm — cost an average $1,636 in 2022, according to Insurify data.

• Flood insurance: The average flood insurance premium was expected to reach $969 in 2022, according to FEMA. Keep in mind that FEMA has several risk categories.

• Wind insurance: The Texas Windstorm Insurance Association notes that average premiums are about $1,750 for its wind policies.^[6] Your premium could be more or less, depending on where you live and other factors that affect premiums.

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Hurricane deductibles

Insurance companies in 19 states plus Washington, D.C., impose special hurricane deductibles. These deductibles apply to damage caused by named storms, such as a tropical storm or hurricane, and storms with wind speeds greater than 74 miles per hour. In some cases, even the threat of such a storm triggers the special deductible. In Maryland, for example, insurers can apply the deductible if there’s a hurricane warning in any part of the state.^[7]

Hurricane deductibles are different from those of standard homeowners insurance policies in that they’re often a percentage of the property’s value — 1% to 5%, for example — rather than a flat amount, such as $500 or $1,000. Structuring the deductibles this way limits the risk insurance companies face from major storms like Hurricane Katrina, which cost insurers more than $41 billion in 2005. However, these deductibles significantly increase homeowners’ out-of-pocket costs.

Do you need hurricane insurance?

Whether you need hurricane insurance and what types you might need depends on several factors. The primary one is your mortgage lender’s requirements. If you purchase a home in a designated flood zone using a government-backed (FHA, VA, or USDA) mortgage loan, flood insurance will be mandatory.^[8]

If you’ve received federal disaster assistance in the past, such as a FEMA grant or low-interest loan from the Small Business Administration, you’ll need to carry flood insurance to qualify for future assistance.

Otherwise, hurricane insurance might not be a requirement, but it can be a small price to pay compared to the cost to repair storm damage to your home and personal property. Just one inch of water can cause $25,000 of damage, according to FEMA, and wind or a storm surge can destroy your home entirely.

How to choose the right hurricane insurance policy for you

Putting together two or more policies to create a hurricane insurance solution might seem daunting, but it’s actually a straightforward process if you follow these steps:

1. Assess your needs. Consider how vulnerable your home is to damage from a hurricane. Distance from the coast and inland bodies of water are major factors. FEMA flood maps can help you evaluate your risk.

2. Review your current homeowners insurance policy. Read your policy carefully to understand what it does and doesn’t cover. Pay particular attention to coverage for wind damage, including exclusions, limitations, and deductibles.

3. Compare quotes from insurance companies. Contact a few insurance companies, including your current one, to request quotes for hurricane coverage. It’s easiest to do this online, where you can fill out simple forms to get personalized quotes based on information you provide.

4. Read your new policy thoroughly. Make sure you understand your new policies, and look for gaps in coverage. Decide whether these gaps warrant investigating additional coverage options.

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How to file a hurricane insurance claim

You purchase insurance with the hope you’ll never have to use it. But in case you do, understanding how to file a claim can help you avoid unnecessary delays:

1. Contact your insurer. Call your insurer when it’s safe, and explain what happened. 

2. Document the damages. Inspect your property for lost, damaged, and destroyed items before you start cleaning up or moving debris or belongings, the National Association of Insurance Commissioners advises. Take photos and video to help you document the damage.

3. File a claim. File a claim as soon as possible. Some companies have a time limit, according to the NAIC. You can file a claim online or by calling your insurer.

4. Meet with the adjuster. Your insurance company will send an adjuster to inspect the damage and prepare an estimate for replacing, repairing, or rebuilding.

5. Learn the claims process. Talk with your insurance agent to find out what the next steps are and how your claim payments will work. Submit any documentation the insurer requests in a timely manner.

6. File an appeal if necessary. If you disagree with the insurance company’s decision, you can file an appeal. The process might differ from one policy to another. Appeals for flood claims should go directly to FEMA. Appeals for other types of policies should start with a written request to the insurer, along with documentation that supports your position. If you’re unable to reach an agreement, contact your state’s insurance department or request mediation through the American Arbitration Association.^[9] If you’re still unable to settle your claim satisfactorily, consult with an attorney.

Check Out: Why Do Home Insurance Companies Deny Claims?

Hurricane insurance FAQs