For a force that is invisible to the naked eye, wind can be extremely destructive and devastating. When the right elements combine, that same air we breathe can turn into something that causes catastrophic damage and sometimes even loss of life. Hurricanes and tornadoes are two of the most commonly damaging wind events in the United States. The average hurricane over the Atlantic region of the United States can easily cause $1.8 billion in damages, and major hurricanes in recent years have caused damages into the $100 billions.
Most homeowner and commercial policies cover wind damage, but hurricanes are sometimes excluded or might require additional coverage. High deductibles can make wind-deductible buyback coverage a valuable tool to mitigate exposure as well. Below are some items your clients may need to consider regarding wind coverage.
Most basic homeowner policies do cover some wind damage.
Tiles blown off roofs, broken windows and tree branches that fly off and cause damage are usually covered, up to policy limits. However, in the case of a hurricane, there is often more extensive damage done, and a basic homeowner policy may not be enough.
Some hurricane-prone territories have to seek out special coverage, due to their high-risk status.
Some states have areas where home insurance carriers do not cover any wind damage. There are specialist carriers that will step in and cover these areas, though. For customers in those states (and anywhere else with a high probability to deal with hurricanes) it’s important to carefully look through their home insurance policy, to ensure they understand the types of damages that will and will not be covered in case of disaster.
A lot of people wait until it is too late to get covered.
Customers without proper coverage may be reminded that they need it when the news shows a big storm front moving their way. However, many insurance companies issue a “binding suspension” when a storm threat is announced. This means no new policies can be issued until that threat passes, and those without coverage are out of luck.
In addition to the above-mentioned characteristics, it’s important to emphasize that wind deductibles can be anywhere from 2 percent to 10 percent (or even higher) of the insured values, giving a home or a commercial building with a $3,000,000 value a $60,000 deductible. With buyback products, they can buydown the deductible to reduce the exposure and make the overall policy more cost-effective for the client. This policy could take the $60,000 deductible down to $10,000 or even $5,000. For a person who is likely already struggling after a disaster, this could make a big difference.
When you have customers in an area like the DelMarVa region, you know they will benefit from proper wind coverage so make sure you are armed with the proper information backed by a knowledgeable wholesaler or MGA to help keep those customers covered in case the next big storm hits their home.
About Wilmington Insurance Agency
Wilmington Insurance Agency delivers comprehensive coastal property solutions. We are a Managing General Agency and provide independent insurance agents with property and liability insurance solutions for residents and businesses primarily in Maryland and Virginia. We work alongside our sister company, Wilmington Insurance Company, established in 1996 and providing Property & Casualty commercial lines business, homeowners, and condominium insurance in the state of Delaware. To learn more about how we can help you to expand your book of business in the coastal market, contact us at (302) 231-2800.