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South Carolinians Need to Review Insurance before the Hurricane Arrives

Find Insurance Policy, Check Deductibles and Update Home Inventory

FOR IMMEDIATE RELEASE

Columbia, S.C. – February 1, 2010– Hurricane season begins soon. Dr. William Gray of Colorado State University is predicting another active season.  South Carolinians need to be prepared and have the proper insurance in place.

According to the Insurance Information Institute, there is over $150 billion in insured coastal property in South Carolina out of a total of nearly $600 billion in property in the state. Seven of the 10 most expensive hurricanes in United States history occurred in the 14 month period from August 2004 to October 2005. Hurricane Hugo still ranks as the 6th most expensive hurricane in US history. With increased growth and development, the population in most of South Carolina's coastal counties has doubled since Hurricane Hugo. The value of homes along the coast has nearly doubled over the past decade. The cost of construction and labor has increased. The cost of reinsurance, the insurance that insurance companies purchase, has doubled for some companies. With predictions of increased storm frequency and severity, homeowners need to take steps to protect their property from damage.

The South Carolina Insurance News Service recommends at least six major items for your hurricane planning list:

Review your insurance coverage with your insurance agent or company and make sure you know what your policy covers. Write down your basic insurance information, such as the name and phone number of your insurance agent, your insurance policy number and your insurance claims phone number and keep it with you if you evacuate.

Find out what your insurance policy says about your deductible. Insurance companies have different types of deductibles. In areas traditionally prone to high wind exposure, there are typically deductibles that apply based on a percentage of the insured's home value. These can range from 1% to 5%. For example, if your deductible is $500 and you have a $200,000 dwelling, you will incur a 2% deductible up-front for any qualifying wind or hail event. So, the total out-of-pocket expenses for a wind or hail claim would be a minimum of 2% of the home's value--or in this example $4,000. The same formula may also apply to the insured amount of your household personal property. Read your insurance policy or call your agent or company to make sure you understand the type of deductible you have. Some companies do allow policyholders an opportunity to "buy down" to a flat deductible. A customer may obtain a policy through the South Carolina Wind and Hail Underwriting Association in the event coverage is unavailable through admitted carriers.

Ask your agent or company about what you can do to reduce the severity of a loss, such as installing hurricane shutters, in order to protect your home and valuable personal belongings. Some insurance companies offer a discount or credit for retrofitting your home to prevent hurricane damage.

Update your household inventory. Make a list, take pictures or videotape your personal belongings and store the inventory in a safe place outside your home. Take your updated inventory with you if you evacuate. Free downloadable software is available through the South Carolina Insurance News Service at www.scinsnews.com.

Check to make sure you have adequate coverage. If you have renovated a kitchen or added a room since you first purchased your homeowner insurance policy then the cost of rebuilding the home has most likely increased. Construction costs in your community also may have risen. It's a good idea to speak with your insurance representative to make sure your coverage is still adequate. The median sales price of existing homes in the United States has increased from $107,200 to $163,600 in the last ten years.

Check to see how your insurance will handle damaged, stolen or destroyed items. Does your policy provide replacement cost coverage or actual cash value? Full replacement coverage is preferable.

Coastal residents may need as many as six or seven separate insurance policies to protect their home and property from disasters: a basic homeowner insurance policy, a wind and hail policy (if your basic homeowners insurance policy does not already cover wind and hail), excess wind coverage, a flood insurance policy, excess flood coverage, earthquake insurance policy and excess coverage such as a personal articles policy.

Flood insurance is NOT part of most homeowner, mobile home or rental insurance policies. You must buy separate flood coverage and there is a waiting period of 30 days. Flood insurance has a $250,000 limit for a home and a $500,000 limit for a business. If the value of your home or business is greater, you might consider purchasing excess flood coverage. Flood is a covered loss for automobiles.

If your homeowner's insurance does not include wind/hail coverage, you will need to purchase separate coverage. A waiting period of 15 days is required before coverage becomes effective.

You can't buy homeowner/renter's insurance after a hurricane watch or warning has been issued.

The comprehensive section of your auto policy generally provides broad coverage for losses due to a catastrophic storm, including rain, hail and wind. Personal possessions within a car are not covered by an auto policy. Gap insurance provides coverage for the financial difference between the lien (or lease) and the vehicle's fair market value.

Loss of use coverage, for auto rental expenses, is an optional coverage and available exclusively via an endorsement.

To help South Carolinians prepare for the hurricane/storm season, the South Carolina Insurance News Service is distributing four free educational brochures:

"Taking a Home Inventory"
"Surviving the Storm: The Wind & Rain Questions and Facts"
"Hurricane Awareness: Advance Storm Preparations"
"Settling Insurance Claims After a Disaster"

For more detailed information on flood insurance, please review the recent information on the South Carolina Insurance News Service's web site at www.scinsnews.com called "South Carolina Homeowners and Business Owners Need to Get Flood Insurance in Place Now."

For more information or to set up an interview, contact the South Carolina Insurance News Service at 803-252-3455.

For over 30 years, the South Carolina Insurance News Service, a nonprofit organization, has been providing free insurance information to consumers and the media about property and casualty insurance issues. The News Service is funded by insurance companies doing business in South Carolina.

South Carolina Insurance News Service
1301 Gervais Street, Suite 715
Columbia, SC 29201
Office: 803-252-3455
Fax: 803-779-0189
www.scinsnews.com