Make Sure You’re Covered, Before the Storm

Living at the shore is a wonderful thing. However, every once in a while, we have to deal with a pesky storm.
Historically, Nor’Easters are the most common threat, but every June through October we have the threat of a hurricane. If a hurricane were to strike Cape May County, are you sure your insurance would cover the damages to your property?
Here are some tips on what to look for on your insurance policies to be sure you are covered when a storm hits.
Homeowners Insurance
• Replacement Cost: Make sure you have Replacement Cost coverage on both your dwelling and your contents. Replacement Cost coverage ensures that in the event of a loss, you will recover the current replacement value without any deduction for depreciation being applied.
A property should always be insured for the reconstruction value, not the resale or market value. While market values may have decreased in the past few years, the cost of construction materials have continues to rise.
According to the Wall Street Journal, as of April, the cost of lumber is up 56 percent this year. Be sure to review your policy every year and make adjustments if necessary, not all policies increase coverage automatically.
• Deductibles: Every Homeowners policy has a deductible. This is the amount that the insured is responsible for in the event of a loss.
It is common for policies on homes all over New Jersey to also have an additional Hurricane or Wind deductible listed on your Homeowners policies. These deductibles may be for a fixed dollar amount or a percent of the building coverage.
For example, a 1 percent Wind deductible on a policy with building coverage of $500,000 would be $5,000. The Wind deductible would apply for any damaged caused by wind. A Hurricane deductible would apply only if damage was caused by a named hurricane that strikes New Jersey.
Flood Insurance
• Flood Insurance is not just for homeowners, it is available for renters and condominium unit owners, too.
Available through the National Flood Insurance Program, you are able to get up to $250,000 in building coverage, and $100,000 in contents coverage on a single-family home.
Renters of a home or business can obtain coverage for their contents and any interior building improvements they have personally made to the building.
There is also excess flood insurance available to cover you up to the full replacement cost of your home. Even if your home is “on the highest point of the island,” you are still on an island and need Flood Insurance.
Take 15 minutes and call your agent to review your insurance policies. Just a few minutes of your time can help avoid costly gaps in coverage, provide a better understanding of your insurance and ultimately, give you peace of mind.
(The above was submitted by Michael McMahon of McMahon Agency.)