Weathering the Legal Storm

Before the hurricane hits, find out if your insurance policy will leave you under water

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When it comes to hurricane preparedness, most South Florida residents know the drill: Stock up on batteries, flashlights and bottled water. But attorneys who deal with homeowners’ claims urge Floridians to familiarize themselves with something else before the next storm: their insurance policies.
 
If you have a home mortgage in South Florida, you’re probably required to have both windstorm and flood insurance. But coverage varies widely.
 
“Look at your deductible,” suggests Donna DeVaney Stockham, of the Stockham Law Group. Make sure it’s not too high to be useful. “A lot of folks are pretty much self-insured, because they can replace their whole roof without reaching their deductible. That can be devastating.”
 
This is true not just for windstorm insurance, she says, but also for flood insurance. Most South Florida property owners can obtain federally subsidized flood insurance, though it is not available for certain areas on barrier islands, where homeowners have to purchase more expensive, unsubsidized insurance. Many agents and attorneys recommend doing so, even if it’s pricey. 
 
One thing property owners should not do, DeVaney Stockham says, is expect FEMA to bail them out if they’re underinsured. “They may come in and help the community, but they’re not going to come in and rebuild your house just because you don’t have flood insurance,” she says. The federal agency does offer emergency grants, but those typically do not cover all necessary repairs or replace all losses. The Small Business Administration offers low-interest loans to help property owners recover from a disaster, but these must be paid back.
 
Hugo Alvarez, of Alvarez Barbara in Miami, advises clients that construction costs may have risen since they bought their homes.
 
“If you took your policy out 10 years ago and you’re still in the same home, the replacement cost was much lower than it’s going to be today,” he says. “You need to think about, ‘How much is it truly going to cost me should my home be blown away by a hurricane now?’” 
 
Renewal time is a good opportunity to make sure a policy covers the true replacement cost of your home. It’s also a good time to shop around for policies that may cover more at a lower cost. Condo owners should not only look at what their own policies cover, but also check the homeowners association’s policy, which may have a high deductible that would require special assessments to repair hurricane-related damages. 
 
Both Alvarez and DeVaney Stockham note there are strict timelines for filing claims. “If you have a flood claim, you have to get on the phone with a lawyer very quickly,” Alvarez says. “Certain notices have to be filed within certain timelines, or those claims are forever barred.” 
 
DeVaney Stockham notes that she had clients with wind damage from Hurricane Wilma who didn’t realize how extensive the problem was until it was too late to file a claim.
 
“They look at it and think they just need to replace a few roof tiles and it would fall under the deductible,” she says. “Then it starts raining and they realize, ‘Wow, the roof is in bad shape!’ My advice is always to get a professional out to look at your house.” 

Florida

Insurance Tips

  • Beware of unlicensed contractors. Check the state Division of Professions Construction Industry Licensing Board’s website to make sure your workers are licensed. 
  • Check the caps on damages for things like mold or water damage in all your policies, not just your hurricane insurance. Those caps might have changed since you got the policies.
  • Like homeowners policies, standard flood insurance policies don’t cover everything, so be sure you know what’s included.

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