Prior to June 1—the official start of the 2025 hurricane season—the National Oceanic and Atmospheric Administration (NOAA) announced its prediction for above-average tropical storm activity in the Atlantic Ocean and Gulf of Mexico. Three to five of the 19 total forecasted named storms are expected to become at least Category 3 hurricanes, putting many Americans along the Eastern Seaboard and Gulf Coast on high alert this summer.
Now, the window for updating or changing an existing homeowners insurance policy is quickly closing. Once a named storm is forecasted in your location, you will not be able to update your coverage. Failure to maintain the proper type or amount of coverage can compound the financial and emotional toll of these powerful natural disasters. With hurricane season now well underway, homeowners in and around these high-risk areas need to review their insurance policies now, rather than later.
Key Takeaways
- 19 states and the District of Columbia require that homeowners have some form of hurricane or named storm deductible included in their policy.
- A standard homeowners insurance policy covers damage to your home’s structure, your personal belongings, and food and lodging if your home becomes uninhabitable due to a hurricane, but homeowners must typically obtain an additional hurricane deductible for the most comprehensive coverage.
- Named storm deductibles typically range from 1–10% of a home’s insured value, meaning a homeowner with $400,000 in dwelling coverage could face a $4,000–$40,000 out-of-pocket deductible before insurance coverage begins.
- Only 4% of homeowners have flood insurance, despite 99% of counties being impacted by flooding since 1996.
- Additional Living Expenses (ALE) coverage becomes essential when hurricanes force families to relocate temporarily, but many policies have inadequate limits for extended displacement.
Understanding Hurricane Insurance Coverage Basics
Traditional homeowners insurance policies cover the dwelling’s basic structure, your personal possessions, and loss of use if your home is deemed uninhabitable during repairs. Although these standard policies cover home damage due to wind, homeowners typically need to obtain supplementary coverage for the most comprehensive protection. Additional deductibles, such as hurricane, named storm, and additional windstorm, as well as flood insurance, sewage backup and debris removal policies, can help homeowners round out their insurance coverage to minimize out-of-pocket costs and achieve greater peace of mind.
Hurricane Deductibles
Homeowners in 19 states and the District of Columbia are required to carry some form of hurricane or named storm deductible, according to the National Association of Insurance Commissioners (NAIC), including the following:
- Alabama
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Louisiana
- Maine
- Maryland
- Massachusetts
- Mississippi
- New Jersey
- New York
- North Carolina
- Pennsylvania
- Rhode Island
- South Carolina
- Texas
- Virginia
When the National Weather Service issues a hurricane watch or warning, any resulting home damage due to that named hurricane is subject to a hurricane deductible, which is often a percentage of a home’s insured value. Deductible amounts vary, but are often higher in high-risk areas.
Named Storm Deductibles
A named storm deductible is a specific type of insurance deductible that applies to damage caused by a tropical storm, typhoon, tropical cyclone, or hurricane named by the National Weather Service or the National Hurricane Center. Named storm deductibles represent a percentage of the home’s insured value, typically ranging from 1–10%, per the NAIC. While that low percentage may seem like a small amount, homeowners could be responsible for up to $40,000—given $400,000 in dwelling coverage—before their traditional homeowners insurance policy kicks in. In addition, named storm deductibles can apply once per calendar year, hurricane season, or individual event, depending on the policy terms, according to the NAIC.
Windstorm Deductibles
Standard homeowners insurance policies typically cover small-scale wind damage that might occur due to particularly strong yet short-lived wind gusts. However, in areas that often experience severe wind or where wind speeds are higher, a separate windstorm deductible supplements a traditional homeowners insurance policy. Due to the destructive forces of hurricanes, tornadoes, and other wind-related events, windstorm deductibles should cover rebuilding the home and replacing any personal property lost or damaged during the event.
Flood Insurance
Homeowners must purchase flood insurance separately from their traditional homeowners insurance policy to cover any damage resulting from water entering the home. The National Flood Insurance Program (NFIP) underwrites flood insurance policies administered by private insurers that partner with the NFIP, but homeowners can also purchase coverage through independent insurance companies. Coverage limits extend to $250,000 for dwelling coverage and $100,000 for personal property, but coverage only applies after a 30-day waiting period.
Sewage Backup and Debris Removal
During a hurricane, a loss of power can cause the sewer to back up and sump pumps to fail, resulting in potentially significant damage to the home. Purchasing a water and sewer backup policy can help protect homeowners and their homes from these events. Although some standard homeowners insurance policies include up to $500 in debris removal coverage, homeowners can purchase additional endorsements to increase that amount to $10,000 or more, according to Insurance Claim Recovery Support (ICRS).
Check Your Coverage Limits and Deductibles
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Review your traditional homeowners insurance policy to determine your current coverage limits, any exclusions, and all applicable deductibles, according to the Insurance Information Institute. While insurance providers often express standard coverage in terms of flat rates, most deductibles represent a percentage of your home’s value. Common deductibles associated with supplementary coverage include hurricane, named storm, and windstorm deductibles.
Homeowners can better understand the applicable coverage these three deductibles provide by exploring how insurance providers determine the final amount of any claim payouts. “The deductible conundrum for hurricanes or named storms is a real problem. In areas prone to those storms, it’s not unusual to see a percentage as the deductible, so a consumer will see 1%, 2% or even 5% sometimes,” says Ted Patestos, CEO and Founder of Tiger Adjusters. “That means if you have a 400k house your deductible could be 20k. Once the carrier applies depreciation, you could be in a situation where you sustain 30k in damage and receive nothing. The tragedy of that is at that point, you are responsible for the repairs in order to keep your insurance (whether you received a payment or not).”
As you review your homeowners insurance policy, ensure your existing coverage incorporates your home’s replacement cost, instead of the real estate market value. Replacement cost refers to the amount of money necessary to rebuild your home using the same or similar materials at current labor rates, without depreciation. You can quickly calculate replacement costs by multiplying the home’s square footage by the average construction costs in your geographical area. At minimum, your current coverage should exceed 80% of your home’s replacement cost, according to CNBC.
It’s also smart to consider your financial situation when balancing affordable premiums with reasonable deductibles. While higher deductibles can typically lower your premiums, ensure you have enough cash on hand to cover said deductibles. Adding extra protection can also increase your premium, but the benefits should far outweigh any budgetary increase to make it worthwhile.
Critical Coverage Gaps That Could Cost You
Flood insurance represents one of the main gaps in coverage that homeowners don’t realize they need until it’s too late. Only 2% of Hurricane Helene victims in North Carolina had flood insurance coverage, according to Politico. Nationwide, only 4% of homeowners are covered under flood insurance policies, despite the fact that 99% of U.S. counties have been impacted by flooding since 1996, according to FEMA.
Mold coverage is also an often-overlooked gap in insurance coverage. After a hurricane or severe storm, mold can continue to damage a home’s structure, and “anything that wasn’t physically damaged by the water/storm and is only damaged by the mold may not be covered,” says Patestos. “That’s a big deal after a hurricane because you may have to wait weeks before a mitigation/restoration company can come and remove all of the wet materials, and that means mold growth in areas otherwise not directly impacted. Which wouldn’t be covered.”
Patestos also advises homeowners to be aware of changes within the industry among insurance carriers. “The first thing is called a ‘roof surfaces endorsement’ which is when the insurance company includes a schedule of values in the policy that says if your roof is this many years old (1, 2, 3, 10 etc.), the max we will pay if you have to replace your roof is X.” This calculation of depreciation can reduce the final amount of coverage insurance carriers provide, especially when a homeowner’s deductible absorbs a large portion of the total repair cost.
“The second thing to look out for is a ‘wind-driven’ rain exclusion,” says Patestos. “When we’re talking about large storms and hurricanes we’re talking about a lot of wind and lot water. When those storms come the pressure and wind is often so high that it forces water underneath the roof shingles/tiles or through the windows and that causes real damage. Insurance companies are now starting to try to include specific exclusions for that type of damage.” Homeowners unaware of this exclusion may face a higher financial burden when rebuilding or repairing their homes after a hurricane.
Personal Property and Additional Living Expenses Coverage
Standard homeowners insurance policies typically include coverage for personal property and Additional Living Expenses (ALE), according to the ICRS. Personal property coverage often represents 50–70% of a homeowner’s dwelling coverage and insures items such as furniture, electronics, and clothing at their replacement cost value, rather than their actual cash value. ALE coverage, sometimes referred to as “loss of use coverage,” covers temporary housing and meals if the insurance provider deems the house uninhabitable during repairs, and also accounts for any lost rental income included in the policy.
Some ALE coverage extends up to 20% of a home’s insured value, according to the Insurance Information Institute. However, these reimbursements may be limited to a short span of time, so it’s critical to review your policy’s fine print. Homeowners subject to extended displacement may be required to pay out-of-pocket for lodging and food expenses once the reimbursement period ends.
When to Add Extra Protection
Consider adding extra protection to your standard homeowners insurance policy if you:
- Own valuable personal items
- Live in a high-risk geographical area
- Require specific coverage
For example, if you own a classic car, specialty insurance can help protect the vehicle at its true value. Obtaining comprehensive insurance coverage can also help you gain peace of mind, especially if you live in a coastal city or state located in Tornado Alley.
Adding extra protection sooner rather than later can also help homeowners maximize their coverage limits and optimize any supplemental coverage before the National Weather Service or National Hurricane Center names a storm. “The most common mistake I see is waiting too long to take action,” says Jon Ruggiero, insurance industry expert at Guardian Service. “People often assume they’ll have time to make changes or buy new coverage once a storm is on the radar, but most insurers won’t allow you to modify your policy or add coverage once a storm is named. That includes flood insurance, which comes with a 30-day waiting period in most cases. By the time a hurricane is headed your way, it’s already too late to make insurance adjustments.”
