Lesson 10: Lessons Learned from Hurricane Season 2004

[SeaBrz_FL]

The top ten most important "lessons learned" were compiled by the news agencies in Central Florida where the residents lived through 3 of the 4 major storms of 2004.

LESSON 10

Know your insurance policy
Many dwellings remain underinsured after last year's hurricanes, experts say.

Byline Jim Buynak, Orlando Sentinel:

The 2004 hurricane season was a costly and puzzling lesson about insurance for millions of Floridians. Getting prepared for the 2005 season might help keep those costs at a minimum and reduce some of the confusion.

Insurers had paid nearly $15 billion in claims early this year, but that only covered about two-thirds of the total estimated loss, according to the state Department of Financial Services.

"The most important thing is to get with your agent and make sure your house value is up-to-date," said Robert Lotane, a department spokesman. "People didn't understand that their deductible was based on a percentage of the value of the structure, not the cost of the damage."

Lotane said people should have the value of their homes updated annually.

"You should pick out a day to do that every year," he said.

Marty and Anthony Nalda learned that lesson the hard way.

The husband-and-wife team of chiropractors are building their dream home on 5 acres east of St. Cloud. But last year's storms delayed their plans.

Hurricane Charley damaged the roof of the home on the property they own where the nanny for their two young daughters lives. Then Hurricane Frances caused a barn that was being converted into a four-bay garage to collapse.

All in all, the family suffered damage totaling $61,000, according to their attorney, Michael Brehne of Maitland.

By the end of March, their insurer, Capitol Preferred Insurance Co., had paid about $40,000.

Part of the problem was they were underinsured, according to Marty Nalda.

"You have to make sure you have the right coverage," Nalda said. "If you have a barn outside, like we did, or a dock over a lake, that requires extra coverage."

It's coverage she will be seeking before more storms sweep across the state.

"We lost the barn -- that's gone, but we're going to try to get coverage for our dock," she said. "I just don't know if anyone will cover it."

Lotane urged Floridians to get clear language from their agent on what their deductible will be "before the storm hits."

For people in older homes, there also might be a hidden cost, he said.

"Your house might not meet the current [building] standards," Lotane said. "They have coverage for that -- ordinance or law coverage -- that is relatively cheap. You really need to talk to your agent about that."

There are also a host of incentive policies offered for homes that are built or rebuilt using windproof materials and procedures.

Florida law requires insurance companies to offer homeowners "discounts, credits, or other rate differentials . . ." for construction techniques that reduce damage and loss in windstorms.

Florida insurance companies were required to submit filings by March 2003 that provide for these wind-mitigation discounts.

"You need to ask your agent, 'Am I getting all the discounts I'm entitled to?' " Lotane said. "That's what they are there for. That's their job."

Studies show that nearly 64 percent of homes in the United States are underinsured "by an average of 27 percent," said Loretta Worters, vice president of communications for the Insurance Information Institute in New York.

Worters said homeowners should ask their insurance agent these important questions:


Do I have enough insurance to rebuild my home?


Do I have enough insurance to replace all my possessions?


Do I have enough insurance to protect my assets?

"Breaking out a home-insurance policy into the three essential areas of coverage -- the house, possessions and liability to others -- makes it easier to obtain the appropriate coverage," Worters said.


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