Things to Know About Homeowners Insurance in Hurricane Season

You don't want to find out about these things when it's too late.

Those who live in coastal areas probably know all the precautions they need to take during hurricane season, but one that often gets overlooked is reviewing homeowners insurance coverage. Those who forget to do this could be in for an unpleasant surprise if they need to file a claim. Here are five key things all homeowners in hurricane-prone areas need to know about their coverage.

1. Home insurers can impose a moratorium on new policies

Waiting until the last minute to purchase homeowners insurance could leave a homeowner without any coverage at all. Many homeowners insurance providers impose a moratorium on new policies in areas in the path of a hurricane when the storm is close. Each company sets its own rules, but many won't write a policy within 24 to 48 hours of a hurricane making landfall, and some continue this moratorium for several days afterward.

Homeowners are better off hunting for a policy well in advance of a storm. This will also give them additional time to compare rates and find the best deal.

2. Insurers only pay up to the policy's limit

This one might seem kind of basic, but it's important to note, especially if it's been a while since the homeowner reviewed their policy's coverage. If building costs have gone up in the area, it might cost more to rebuild the home from scratch than the current policy's limit. But that's the homeowner's problem, not the insurer's.

It's a good idea for everyone to review their homeowners insurance coverage every year and make sure the limits are high enough to pay for a full rebuild, if necessary. Homeowners who find their limits are too low should reach out to their insurer to increase them.

3. Homeowners insurance policies may have a separate hurricane/windstorm deductible

All homeowners insurance policies carry deductibles. These are the out-of-pocket costs the homeowner must pay before the insurance company will pay anything toward the claim. Usually, this is a standard dollar amount, which the homeowner agrees to when they purchase the policy. But an increasing number of insurers are requiring homeowners to pay a separate -- and higher -- deductible for hurricane or windstorm damage.

These hurricane deductibles are often priced as a percentage of the policy's limit. For example, a 1% deductible on a $200,000 home insurance policy amounts to $2,000. Homeowners who aren't sure about what they might have to pay for a hurricane deductible should reach out to their home insurer to ask. Then, they should try to set at least this much aside in their emergency fund so they have the money ready in the event of a claim.

4. Home insurance policies don't cover everything

Most homeowners insurance policies cover hurricanes and the wind damage they do, but they don't cover flooding damages, even if they happen because of a hurricane. Those who don't want to pay out of pocket for costly flood repairs need to invest in a separate flood insurance policy. Mortgage lenders often require this of homeowners who live in areas at high risk of flooding.

Sewer backups are another thing that's not commonly covered by a standard homeowners insurance policy. This can also happen during hurricanes as a result of flooding and other storm damage. Many insurance companies allow homeowners to add an endorsement to their policy that includes this protection if they want it.

5. Certain precautions might earn homeowners a discount

Some home insurance companies offer discounts to homeowners who take steps to protect their homes against hurricane damage. One of the most common examples of this is storm shutter discounts. These shutters reduce the risk of storm damage to windows and can therefore reduce the cost of a hurricane insurance claim.

Homeowners interested in getting a home insurance discount for the measures they've taken should reach out to their insurer to inquire if this is an option. If not, they may want to shop around and compare rates with other top homeowners insurance companies to see if they can find a better deal.

No one wants to file a hurricane insurance claim -- and no one wants to deal with a hurricane at all. But these things happen, so homeowners need to be ready. Building an insurance review into annual hurricane season preparations can give a homeowner peace of mind and one less thing to worry about if the worst happens.