DEFINITION
Windstorm insurance is usually an add-on policy for homeowners insurance. It provides protection if a wind event such as a hurricane or tornado damages your home or personal possessions.
How Does Windstorm Insurance Work?
Windstorm insurance is a supplemental policy you can add to your existing homeowners insurance. Also sometimes known as hurricane insurance, this type of policy helps cover you if a severe windstorm, hailstorm, or hurricane damages your home.1 It’s typically required by mortgage lenders as a condition of the loan for property owners who live in certain locations, such as along the U.S. Gulf Coast or in specific coastal states.
Example of Windstorm Insurance
Here’s an example: You elect to have a 2% deductible and your home is insured for $250,000. Your deductible would be $5,000. So if a hurricane caused $30,000 worth of damage to your home and the items inside, your check from your insurance company would be the approved amount minus your deductible, or $25,000.
Typically, the higher your deductible, the lower your premium will be. Selecting a higher deductible can help you save money. However, this means you will have more out-of-pocket expenses if your home is damaged.
What Does Windstorm Insurance Cover?
Windstorm insurance policies cover the inside and outside of your home if it’s damaged by severe wind events. This includes your personal belongings, your home’s physical structure (roof, windows, walls, etc.), and other buildings on your property.
However, it does not cover damage related to floods and storm surges. In an intense wind event, such as a hurricane, both wind and water damage may occur. Windstorm insurance would only cover water damage in your home that occurred as a direct result of the wind damage.
What Windstorm Insurance Doesn’t Cover
Windstorm insurance may not cover flooding or storm surges from a wind event, it might make sense for you to purchase a flood policy as well.1 In fact, if you live in an area that’s prone to both windstorms and flooding, your lender may require you to purchase both types of insurance policies. That way, your home is protected from more natural disasters.
Let’s say you live along the Florida coast, where you’re required to have windstorm insurance. A hurricane comes through, taking the roof off your house. The rain that comes in causes a lot of damage to your second floor. The storm also causes a surge of water to rush into your home, flooding the basement and main floor.
Your windstorm insurance would cover the physical damage to your home. Your insurer may also cover the things on the second story damaged by the rain that came in after the roof was blown off. Check your policy to be sure.
However, because the storm surge wasn’t directly caused by wind damage to your home, the flood damage in your basement and main floor wouldn’t be covered unless you had a separate flood policy.