COOK, HALL & HYDE, INC.
SPOTLIGHT
PRIVATE CLIENT SERVICES
Are you really prepared for a hurricane ?
Among our greatest concerns
As insurance advisors, among our greatest concerns is being
unable to help clients understand the need to secure
important protection for risks which we know pose a
significant risk of loss. Representing many clients with
magnificent homes in the metropolitan NY area, the losses we
fear the most are those that will be caused by our next big
hurricane. The following information is offered to help clients
and prospective clients understand several key hurricane
protection issues, and to understand the importance of taking
action to minimize the costs and inconvenience of losses that
may arise from our next hurricane.
To begin, it’s not a matter of IF a hurricane will occur
While we don’t know where, when or exactly what kind of
damage to expect, we do know that hurricanes pose the
greatest threat of causing significant damage to homes on
Long Island and other parts of Metropolitan NY. Trees crashing
onto roofs, rain and debris entering through shattered
windows, flooding caused by rising surface water and / or
drainage problems, etc., etc, can and WILL cause widespread
property damage to many homes in our area, someday.
Prepare now ...for a weather event that is overdue
If you agree that the threat of damage to your home is a
distinct possibility, then consider the importance of taking the
steps now to minimize the impact of a future loss. Each year
as storms form in the south and begin to head towards New
York, we receive hundreds of calls to increase insurance
coverage. Please be advised: as storms approach, all
insurance carriers place moratoriums on adding new risks or
increasing existing coverage. Since it is too late to implement
positive changes as the storm approaches, we offer the
following suggestions for those who wish to act before the next
hurricane approaches:
1. Know how much you’ll need to pay after a hurricane loss
Virtually ALL carriers issue homeowner policies with separate
deductibles for losses caused by hurricanes. We have seen
many policies that apply hurricane deductibles of 5% of the
value of the dwelling, with some carriers having no “cap” on
this limit, while others do. An “uncapped” 5% hurricane
deductible, for example, equals a $150,000 out of pocket
expense for someone with a home insured for $3,000,000.
Additionally, carriers often define hurricane differently. The
differences can be significant, and you should know how they
apply to you. Minimally, you should be aware how your
coverage will respond to losses caused by a hurricane.
2. Know what is available We have placed coverage for
qualifying homes that are located 1 mile or more from the
ocean with no extra hurricane deductible, and have also
helped clients to secure a 2% hurricane deductible for
qualifying homes
INSURANCE INSIGHTS
as close as 2,500 feet from the ocean. Generally, quality
carriers will apply a maximum of $50,000 hurricane
deductible. Again, we’ve seen much higher deductibles
applied by some large carriers.
3. Get a guarantee Place coverage with a carrier that will
guarantee the funds to rebuild or replace your home, even if
those costs exceed the amount of coverage in place.
Especially for custom homes, the costs for skilled labor and
material are always significantly higher after a catastrophic
loss. The only hedge against post storm building cost
increases is a true replacement guarantee, offered by only a
handful of carriers.
4. Expect water damage While the ocean may not enter
your home, homes on the flat terrain of eastern Long Island
will be especially highly vulnerable to rising ground water
and water intrusion from overloaded drainage systems.
Some policies do cover ‘water backup’ from drainage
systems, but damage from rising ground or surface water is
never covered. The best protection is to add a basic flood
policy to your insurance program, often for as little as $350
annually for $250,000 of coverage. Higher limits are
available, and costs vary by location.
5. Cover your windows While it may be impractical to
remove large trees that can damage your home, it is not
difficult to prepare temporary storm panels that can be
easily assembled over windows as a storm approaches. To
eliminate the need to install permanent storm shutters or
nail plywood over windows, the attached information
identifies a practical alternative that is both effective and
easy to install as a storm approaches.
6. Organize your records Often, the greatest inconvenience
after a hurricane stems from the fact that important
financial and household records are destroyed. Click here
for a list of tips by the Financial Planning Association that
are helpful in pre-disaster planning.
Other Important Considerations
The financial strength and the claims paying practices of
your insurance carrier will become critically important in the
aftermath of widespread catastrophic storm damage.
Additionally, because the coverage provided by insurance
contracts varies widely, the differences usually become
most apparent after large losses. As detailed in this New
York Times article, coverage such as law and ordinance,
functional replacement, loss of use, and debris removal will
become critically important after a large loss.
For more information on this topic, contact:
Timothy P. O’Brien, Director of Private Client Services
COOK, HALL & HYDE, INC.
Offices in East Hampton, Plainview, Bethpage, NY and Fair
Lawn, NJ
Phone: 631-329-7246 or e mail: tobrien@chhins.com