Deciding whether or not to take out hurricane insurance can often seem like a difficult decision, especially for those living in coastal areas. A homeowner should first consider the likelihood of a hurricane or other type of natural disaster occurring in his area. Some regions are naturally more at risk, but the disaster insurance is also higher for those residents. Also, homes or businesses that are mortgaged by a bank must have hurricane insurance in most areas. People who rent or lease a home may also want to consider accepting hurricane insurance as well to protect their personal items.
The cost of hurricane insurance in coastal areas is often a major expense. Areas that have seen multiple natural disasters can cost tens of thousands of US Dollars (USD) per year for even minimal catastrophic protection, and in many cases, it may not appear to be affordable. In fact, some regions of the world can not even qualify for hurricane insurance at all, simply because investment bankers have determined that the chances of a natural disaster occurring over time are nearly 100 percent. When this type of disaster insurance is offered, it often helps to review the area's history to determine the probability of an incident occurring.
Many financial institutions require hurricane insurance to be carried throughout the course of any loan if the home has even a slight chance of being hit by a hurricane. This stipulation is so that their investment is protected from water and wind damage regardless of what happens. The monthly payment is normally included in the homeowner's mortgage payment, and any claims would be handled through the bank. Additional coverage for wind or flood damage can also be taken to provide additional protection, but in most cases, it is not cost-effective.
Some governments subsidize hurricane insurance to lessen the overall cost. Although it may cost the region millions of USD per year, homeowners simply could not afford to live there otherwise. Other areas have a national fund set aside to assist hurricane victims in rebuilding after a major storm. The government would have complete control over which areas would qualify for this assistance, though, so a consumer should not consider them a guarantee. Checking these subsidies can often help you determine if hurricane insurance is a viable option.
People who rent property from a landlord are in a unique situation. They often will not qualify for hurricane insurance because they do not own the property, even though they have a vested interest in protecting it. Renter's insurance is often the only alternative available for residents who want additional coverage. This policy would offer a fair replacement value of any items stored on the property at the time of the storm, including things like electronics, furniture, appliances, and other valuable items. There is usually a maximum payout determined by the policy as well, so homeowners should have their assets evaluated before taking out such a policy.