Living in a hurricane-prone area means thinking twice about protecting your home. Some storm seasons may be more active than others. Regardless, you don’t want to roll the dice by not taking out the insurance policies you need. Wind and storm surge damage often cost you more to repair out-of-pocket than annual premiums.
At the same time, you need an insurance policy you can afford. There’s no sense in stretching the budget if you don’t have to. Here are four ideas on how to lower your premium.
1. Windstorm Mitigation
Choosing insurance coverage is a bit more complicated when your home is in hurricane country. Your policy may cover wind damage from named storms, but not water damage from flooding. More than likely, there’s a separate hurricane deductible based on your policy’s dwelling coverage.
You might consider getting flood insurance or extra hurricane insurance coverage, which will add to your costs. For homeowners, it’s a catch-22. Take out additional policies and add coverages to protect your home. Or, hope your home doesn’t sustain the type of damages your existing policy doesn’t cover. However, there are other steps you can take to avoid the catch-22 scenario.
Know what damages your policies cover and when. See if there are gaps you can fill by working with your agent. Your carrier may be able to offer discounts for bundling coverage or mitigating your property against wind damage. Have your home inspected for windstorm mitigation, make it wind resistant, and let your agent know about it. Some states require insurance carriers to offer discounts for windstorm mitigation.
2. Home Elevation
Storm surge is nearly a guarantee with hurricanes. Even if your home is further inland, flood damage from rising waters is a threat. The storm surge combined with heavy rainfall often has nowhere to go. It can take weeks or months for the water to drain, even with human intervention.
The U.S. experienced $7 billion in damages from flooding in 2023 alone. Some of this damage came from severe storms, successive atmospheric river events, and hurricanes in coastal states. When disasters strike, the expenses accumulate fast for property owners, governments, and insurance companies. Carriers must honor their contracts, paying what they owe under the policies.
On the other hand, insurance companies have to remain financially solvent. The carriers do this by assessing risk and charging appropriate premiums. If you have beachfront property, you can lower the risk of flooding by elevating your home. You might consider elevation even if you live a few blocks from the coastline. By getting your home off the ground, you’re mitigating the risk of flood damage and possibly lowering your insurance premium.
3. Longevity
Staying loyal to one insurance company may seem counterintuitive to lowering your costs. After all, you should shop around to see if you can get a better price. While conventional wisdom has merit, there’s also something to be said for loyalty. Constantly switching carriers every time there’s a premium hike may not work in your favor.
First, there could be moratoriums on coverage before forecasted hurricanes hit. A moratorium means you might not be able to change companies or purchase coverage at the last minute. A delay of one to two days before a storm makes landfall is common for moratoriums, but the timeframe could be longer.
Second, some carriers reward longevity with premium reductions. If you keep your policy with the same company for three years or longer, you could get a loyalty discount. It doesn’t hurt to periodically get quotes from other carriers. But you want to check the fine print because you might not be trading apples for apples. Each insurance company has separate policy language and coverage stipulations.
4. Added Discounts
Insurance carriers are like any other business. Companies sometimes have under-the-radar discounts for employees of specific organizations. Think “perks at work” discount programs. Insurers might also offer incentives to members of professional associations like AARP.
Beyond this, carriers could have savings for specific demographics such as those aged 55 and older. To get this discount, you don’t necessarily have to belong to AARP or another professional association for seniors. Insurance companies offer discounts to these groups based on lowered risk. For instance, retired policyholders are likely to be at home more often.
This lifestyle factor means retirees are going to be able to alert authorities sooner about potential robberies and damages. When seeking quotes for home insurance, check to see if you can take advantage of other discounts. If employed, browse your company’s employee discount program. Ask agents about incentives for your age group, lifestyle, and any associations you belong to. Also, see if the carrier layers discounts or if it’s better to go with the highest one.
Making Home Insurance Affordable
An increase in natural disasters in various states is raising the stakes for insurance companies, local governments, and property owners. Policyholders in Florida pay premiums costing nearly five times the national average. Carriers are pulling out or liquidating as claim values exceed what they can collect in premiums. Consequently, policies with state-run insurance programs are increasing along with pending rate hikes.
While everyone is feeling the squeeze, there are ways for owners of hurricane-prone properties to control their costs. Strengthening the home against potential storm-related damage is the most critical step. The more risk you mitigate, the better from the insurance company’s perspective. It’s also important to check your coverage and calculate when it makes sense to switch. Don’t forget to ask about added discounts, including those for loyalty and multiple policies.
