Living in Alabama, you’re no stranger to the power and potential dangers of hurricanes. According to the National Oceanic and Atmospheric Administration (NOAA), Alabama experiences an average of one named storm making landfall every five years. While these storms can bring heavy rain and storm surge, the most common and destructive element is often the wind. That’s where hurricane insurance comes in.
This blog post aims to answer your questions about hurricane insurance in Alabama, including:
- What it is and how it works
- How much it costs
- What it covers and what it doesn’t (like flood damage)
- Whether you need it in Alabama
By understanding your options, you can make informed decisions to protect your home and family.
What is Hurricane Insurance?
Unlike flood insurance, which is a separate policy often required by mortgage lenders in flood-prone areas, hurricane insurance typically isn’t a separate policy. Instead, it’s coverage included within your standard homeowners insurance for wind damage caused by hurricanes and tropical storms. It kicks in after you pay your hurricane deductible, which can be a flat dollar amount or a percentage of your dwelling coverage.
However, not all homeowners insurance policies automatically cover wind damage. It’s crucial to review your policy carefully to understand your coverage and exclusions.
Here are some additional key points to remember about hurricane insurance:
- Coverage may vary by insurer: Different insurance companies may offer different levels of coverage and have varying deductibles.
- Named storm vs. unnamed storm: Some policies may only cover damage caused by named storms, while others may also cover damage from unnamed tropical storms.
- Additional coverages: You may be able to purchase additional coverage for wind damage to specific structures like carports or gazebos.
How Much Does Hurricane Insurance Cost?
The cost of hurricane insurance in Alabama varies depending on several factors, including:
- Your location: Coastal areas with higher hurricane risk typically have higher premiums. According to the Alabama Department of Insurance (ALDOI), coastal counties like Mobile and Baldwin have the highest risk and, consequently, the highest premiums.
- Your home’s value: The higher the value of your home, the higher the cost of coverage. This is because your dwelling coverage, which forms the basis for calculating windstorm deductibles in some cases, is directly tied to your home’s value.
- Your deductible: Choosing a higher deductible can lower your premium, but you’ll be responsible for paying more out-of-pocket if you need to file a claim. For example, opting for a 5% deductible instead of a 1% deductible will decrease your premium but significantly increase your financial responsibility in the event of a claim.
- Your credit score: Generally, individuals with good credit scores receive lower insurance premiums.
- Claims history: If you have a history of filing claims, your insurance premium may be higher.
According to the National Association of Insurance Commissioners (NAIC), the average cost of homeowners insurance in Alabama, including wind coverage, is $2,153 per year. However, your actual cost could be higher or lower depending on the factors mentioned above.
Hurricane Insurance vs. Flood Insurance
It’s important to understand that hurricane insurance doesn’t cover flood damage. While hurricanes can cause flooding due to storm surge and heavy rain, flood damage requires separate flood insurance.
The Federal Emergency Management Agency (FEMA) offers flood insurance, which is often required by mortgage lenders for properties in high-risk flood zones.
Here’s a table summarizing the key differences between hurricane and flood insurance:
| Feature | Hurricane Insurance | Flood Insurance |
| What it covers | Wind damage caused by hurricanes and tropical storms. | Damage caused by flooding from any source, including storm surge, heavy rain, and overflowing rivers. |
| Typically included in | Homeowners insurance (may vary by insurer) | Separate policy |
| Required by lenders | No (except in rare circumstances) | Often required for properties in high-risk flood zones |
Which States Have Hurricane Deductibles?
According to the Insurance Information Institute, 19 states along the Atlantic and Gulf coasts, including Alabama, have hurricane deductibles. These deductibles apply specifically to wind damage caused by hurricanes and tropical storms, and they are separate from your standard homeowners deductible.
Here are some additional details about hurricane deductibles:
- Deductible type: Hurricane deductibles can be a flat dollar amount or a percentage of your dwelling coverage.
- Deductible amount: The amount can vary significantly depending on your location, your insurer, and the type of deductible chosen.
- Single season rule: Most states with hurricane deductibles have a “single season rule”, which means you’ll only pay your deductible once during a hurricane season, even if your home is damaged by multiple storms.
What is Alabama Hurricane Insurance?
As mentioned earlier, hurricane insurance in Alabama is usually not a separate policy, but rather coverage included within your homeowners insurance for wind damage. However, some insurance companies may offer separate windstorm or hurricane deductibles in addition to the standard homeowners deductible.
Here are some additional points to consider:
- ALDOI recommendations: The Alabama Department of Insurance (ALDOI) recommends that homeowners review their policies carefully to understand their coverage and windstorm deductible options. They also advise not waiting until a storm is imminent to purchase or update their coverage, as insurance companies may place moratoriums on new policies or policy changes during hurricane season.
- Standard vs. percentage deductibles: Alabama allows insurers to offer both flat dollar and percentage-based hurricane deductibles. Percentage-based deductibles can be particularly impactful, as they are based on a percentage of your home’s insured value, which can mean a significant out-of-pocket expense in the event of a claim.
What Does Hurricane Insurance in Alabama Cover?
Alabama hurricane insurance typically covers:
- Damage to your home’s structure: This includes damage caused by wind to your roof, walls, siding, windows, and doors.
- Detached structures: This may include coverage for damage to garages, sheds, and other detached structures on your property, depending on your policy.
- Personal belongings: This covers damage or destruction of your furniture, appliances, and other personal belongings inside your home caused by wind.
It’s important to note that specific coverage details can vary by insurer, so it’s crucial to review your policy thoroughly to understand what is and is not covered.
How Much is Hurricane Insurance in Alabama?
The cost of hurricane insurance in Alabama can vary significantly depending on the factors mentioned earlier. However, as a reference, the average cost of homeowners insurance in Alabama, including wind coverage, is $2,153 per year according to the NAIC.
Remember, this is just an average, and your actual cost could be higher or lower depending on your specific circumstances. To get an accurate idea of how much hurricane insurance will cost you, it’s essential to contact a qualified insurance agent like the professionals at Sconyers Insurance. We can help you compare quotes from different insurers and find the coverage that best fits your needs and budget.
Do You Need Hurricane Insurance in Alabama?
While hurricane insurance isn’t mandatory in Alabama, it’s highly recommended, especially if you live in:
- Coastal areas: These areas are at a higher risk of experiencing hurricane winds and storm surge.
- Hurricane-prone regions: Even inland areas can experience significant wind damage from hurricanes.
- Areas with a history of severe weather: If your area has a history of tornadoes or other wind-related events, hurricane insurance can provide valuable protection.
Having hurricane insurance can provide you with financial peace of mind in the event of a storm. It can help you rebuild or repair your home and belongings, allowing you to focus on recovering from the storm’s impact.
Conclusion
Understanding hurricane insurance is crucial for Alabama residents. By reviewing your current homeowners insurance policy, speaking with a qualified insurance agent, and considering your individual risk factors, you can make informed decisions about your hurricane insurance needs.
Contact Sconyers Insurance today for a free consultation and discuss your hurricane insurance options. We’re committed to helping you protect your home, family, and financial security in the face of potential storms. We offer personalized service and access to multiple insurance carriers, ensuring you find the best coverage at a competitive rate. Don’t wait until it’s too late – prepare now and safeguard your most valuable assets.