How Does The Hurricane Zone Affect My Insurance?

When it comes to property damage inflicted by a hurricane, many factors can have an impact on insurance claims. Wind, flood, and property insurance policies all must be purchased to adequately cover the many ways hurricanes can cause devastation to property. Despite having all the necessary coverage in place, properties that are located within the hurricane zone may face more issues with coverage than other areas.

The Hurricane Zone and Property Insurance Coverage

A commercial property’s location is incredibly important for business owners. Location can help a business define the clientele it is looking to attract, the industries it serves, as well as its proximity to other businesses that could increase foot traffic or build client relationships. For businesses in coastal areas, however, the location of the property can also have an impact on insurance coverage, particularly when it comes to covering damage sustained during a hurricane. The area most susceptible to hurricanes is known as the hurricane zone.

In the U.S., the hurricane zone includes areas, such as the Caribbean, the Gulf of Mexico, and beaches along the Eastern coastline during the summer and fall months, which comprise the Atlantic hurricane season, as well as the Hawaiian Islands. According to the National Oceanic and Atmospheric Research Administration (NOAA), the U.S. currently sits at number five in the top 10 countries with the most hurricane activity since 1970.  

While the hurricane zone primarily indicates the areas that see the most hurricane activity, it also indicates the area where owning property may have a higher cost for insuring the property. The hurricane zone has an impact on policies that cover for hurricane damage in the following ways:

• Flood Insurance: To be protected from flooding due to a hurricane, commercial property owners will need to purchase flood insurance. If a business is located in a hurricane zone or high-risk flood area, and the property owner has a mortgage from a federally regulated or insured lender, they are required to obtain flood insurance coverage. Additionally, commercial flood insurance premiums increase when a property is located in a hurricane zone or an area with moderate to high flood activity.
• Windstorm Insurance: In coastal areas located within the hurricane zone, coverage for hurricane wind-related damage is generally not covered under a general property policy. Rather, windstorm insurance must also be purchased to adequately cover any wind-related damage. In addition, properties located in the hurricane zone or high-risk areas of windstorm damage are likely to see higher deductibles. This ultimately depends on the location of the property and the year it was built, its construction type, and the condition of its roof. Insurance rates within the hurricane zone are often among the highest in the nation.

Hurricanes Can be Costly to Commercial Property Owners

Business owners in Texas and other coastal communities are no strangers to having multiple policies for protection against hurricane damage. However, even if owners have a valid claim for their hurricane losses, their recovery may be limited due to ambiguities in their insurance policies’ language, exceptions, or problems with the insurance company in general. There are a variety of factors that can cause insurance payments to vary widely for commercial property owners. The extent of hurricane losses most often depends on the following aspects of the property:

• Location: Coastal areas are more prone to hurricane damage. Unfortunately, private insurers may refuse to cover wind damage for some Texas counties, meaning business owners will have to secure coverage for this peril through the Texas Windstorm Insurance Association (TWIA).
• Structure: The age and design of a commercial property can make a big difference in the amount of money it will take to repair it. Flooded basements can cause foundation damage that weakens the entire structure, while multi-story buildings may need extensive repairs on some levels, causing aesthetic problems that may not be covered by insurance.
• Pre-existing damage: Insurance companies will often use any excuse possible to get out of paying legitimate claims. One method often used is to blame the loss on something other than the hurricane itself. Wear and tear, lack of proper maintenance, and pre-existing damage are all common items cited when an insurance company attempts to avoid paying a claim. Businesses that perform regular safety and building maintenance inspections to mitigate potential damage are less likely to be put off by insurers, especially if they routinely perform maintenance and repairs.
• Industry: The type of industry could also influence the potential hurricane damage losses. For instance, farms, ranches, and other outdoor enterprises are at particular risk of income losses due to flooded fields or lost livestock, while industrial manufacturers are likely to lose millions of dollars worth of heavy machinery to water intrusion.

Hurricane Damage Insurance Coverage Attorneys

Many different factors can impact the cost and how much coverage can be obtained to cover hurricane damage. This is especially true for business owners with commercial properties located within the hurricane zone. If you are concerned about having enough coverage for your commercial property in the event of a hurricane or are dealing with an insurance company that has wrongfully delayed, underpaid, or denied your claim, the attorneys at Raizner Law can help. Contact our office today to find out how we can assist with your claim.

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