Extra: What Does Home Insurance Cover After A Disaster?
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Church's original recipe is back. You can never go wrong with original. Still tastes the same like back in the day. Right now, get two pieces of chicken starting at only $2.99 or 10 pieces starting at only $10.99. Church's. Offer valid at participating locations. This is the Fox News Rundown Extra. I'm Dave Anthony. Today, something we all need, no matter where we live.

And with the hurricane and flood disasters the last couple of weeks from Florida to North Carolina, we thought it would be a good idea to focus on the homeowners coverage most of us have and the insurance many of us don't for flooding.

Now, the other day before Milton hit Florida, we talked to Mark Friedlander with the Insurance Information Institute. And since we had to trim the conversation to fit it into the rundown we posted on Tuesday, we thought it would be good to let you hear all of it in this weekend extra. I know I learned some things in the insurance. I'm guessing you will as well. I hope so. And I hope you come back for more. There is something new every day here on The Rundown.

Thank you, as always, for listening. And now Mark Friedlander on the Fox News Rundown Extra. Joining us on the Fox News Rundown is Mark Friedlander. He is the director of corporate communications at the very busy these days Insurance Information Institute. As a lot of people in the southeast clean up and deal with claims from Helene and the damage that that hurricane did even as far into the mountains of North Carolina.

But also we have Hurricane Milton, a major hurricane bearing down on Florida's west coast. So there's a lot of people concerned dealing with their property on this. First of all, Mark, thanks very much for being with us. Thanks so much for having me. I mean, this has been and will be a very busy time for your industry.

We expected this hurricane season to be well above average. It started off kind of slow, but it has exploded in the last few weeks. We have had...

five hurricanes form in just the past few weeks. It is an amazing period for tropical activity, and it shows why being financially protected from these storms is so important. Well, that's right. I mean, we are also dealing, let's first get into Florida because it's dealt with Helene, about to deal with Milton. The insurance market there is

Florida has been hit with a lot of hurricanes in recent years, and Ian, certainly on the west coast of Florida a couple of years ago, caused a lot of devastation. And it's been difficult for insurance companies, and now they're dealing with it again. There are some companies that don't want to cover people in that state. Am I right?

The Florida property insurance market has actually shown a lot of improvement over the past year due to legislative reforms by the Florida State Legislature, eliminating one-way attorney fees, which was a big driver of legal system abuse and frivolous lawsuits, and then claim fraud, eliminating assignment of benefits, which is when you sign over your claim to a third party. Those actions taken by the legislature have led to a stable

position for Florida insurers. And in fact, they're in their best financial position in many years. And as a result, they are well capitalized to act as financial first responders for their customers who were impacted by hurricanes we've seen previously this year, Debbie and Helene, and now Milton, which is coming our way. So what is it that

people need the most when they're dealing with their insurance. Obviously, they have to have all their paperwork ready because if they have to leave their house, right, they have to have someone to contact because they might not be able to get back in.

It's really important to have what we call a go bag, which includes important documents, how to contact your insurance company. The good news is many property insurers today have mobile apps, which makes it really easy to start a claim. And you don't even need your paperwork because we have the mobile app on your phone already.

you have taken the first step to filing a claim. But the other big step is having a home inventory. It's really important to have a documented inventory, all your possessions, photos of everything, because you want to prove what you had in your home before the storm struck if you suffer damage. And it makes it so much simpler if you have this detailed home inventory. We recommend you store it somewhere on the cloud, somewhere outside your home so you can get easy access to it.

And it would make the claim filing process so much smoother. Okay. There's another element, though, that is difficult for people, and that is if they get flooded out. I mean, we've had that from parts of Florida all the way up to western North Carolina. Creeks overran. Towns and communities got destroyed by flooding. That's different than your regular homeowner's insurance, correct? Yes.

Absolutely. A lot of consumers don't understand the difference between flood insurance and property insurance. And it is very clear in your property insurance policy, whether it's a home policy, a condo policy, even a renter's policy, flood insurance is not typically included. You need to purchase that separately, either through the National Flood Insurance Program or a private flood insurer program.

And sadly, the catastrophe we've seen, particularly in the southern Appalachians, where so few homeowners have flood insurance. In fact, it's under 1% in most of the hardest hit areas. Flood insurance is the biggest

biggest insurance gap we see across the country today. Roughly about 6% of U.S. homeowners have flood insurance. So that leaves 94% that are vulnerable to floods, meaning they have no coverage for a flood event. And typically, we only see flood policies purchased in coastal counties that are prone to severe flooding. Well, the bottom line is it floods everywhere.

Everybody could flood. 90% of disasters involve flooding. You are not immune to flooding no matter where you live in the country.

For

$45 upfront payment equivalent to $15 per month. New customers on first three-month plan only. Taxes and fees extra. Speeds lower above 40 gigabytes. See details. All right, so if you live in an area where there's a river or a creek or something that when you have torrential rain rises, you really need it. Is that the issue? You do, and if your insurance agent's telling you you're safe, you're in a low-risk zone, maybe find another agent because all insurance agents should be

pushing you to purchase flood insurance. In fact, if you're considered in a low to moderate risk area, your flood coverage may run only 40 to 50 hours a month. That is well worth the investment because one inch of water

could equal $25,000 or more damage, just one inch. Can you imagine the scenes we've experienced here in Appalachia from Hurricane Helene and feet of water in your home, how much damage that is? Homes swept away, just a terrible tragedy and without

Flood insurance, you have no financial protection for that type of disaster. What about wind-driven? Like you have a horrible rainstorm and that causes damage and rain gets in and something like that to your home. You didn't have a creek that overflowed and it flooded you out, but you had something like that. Would that be covered by regular insurance?

Yes, we call that top-down water damage. For example, the wind tore a hole in your roof, the rain poured in, damaged your home. That is covered by your property insurance. So typically top-down is property insurance. Bottom-up, meaning flood or storm surge, is flood insurance. That's how you can tell the difference. Okay, all right. And what if there was a hill and you had torrential rain in this era of climate change? We've seen that. A foot of rain that they didn't expect.

And you get flooded that way. Is that the same as a creek overflows or the storm surge and I'm on the coast comes in and floods me out? Is that different or no? It is really the same. Yeah. It's also would be considered a flood insurance type of loss. Once again, property insurance losses are typically when the home has been damaged by wind and there was rain intrusion because of that. Gotcha. Okay. Um,

What should I also worry? There's a Wall Street Journal story. Owners of homes and businesses slammed by Helene could be in for a nasty shock when they check the small print of their policies. And the idea of the story was that property insurers in recent years have trimmed coverage and had increased rates. So when they say look at the fine print, what should I as a homeowner be looking for when it comes to my coverage for my property?

Your property insurance policy clearly spells out what perils are covered. And windstorm damage is typically part of a standard home, condo, or renter's policy. Like if a tree comes down on my home, right? Like a tree. Yes, that's covered. Yeah, exactly. That's covered. But here's another scenario. A tree hits your home and it destroys your garage and your car's in your garage. Well-

The property damage component is covered by the home insurance, but the vehicle damage is covered by another policy, comprehensive auto, which is about 75% of drivers have that. It's an optional coverage that you add to a standard auto policy. So sometimes both your property and auto insurance come into play because a tree fell on your home. Okay. What about the, you know, we talk about the numbers, whether it's deductibles or what, but when you have homeowners insurance, okay.

you can have different types of coverage, right, for damages. But isn't there also a different way where you can have the costs to replace? Isn't that different? Well, yeah, there's two factors here. First of all, let's talk deductibles. In hurricane-prone areas like Florida, everybody has a standard home deductible, which most people across the country have, but they also have a hurricane deductible. And when there is a named home,

like Milton, that goes into effect. So any wind damage from the storm this week would be subject to the deductible, meaning the windstorm deductible is subtracted from your claim. So you have to keep that in mind too. And typically many people will choose a higher deductible to keep their premium costs down. So you just have to remember that when you have a high deductible. Okay. But when it comes to the damage, when you have your policy, right?

What should you be wanting? The cost to completely replace your home? Is that different than just the cost of damage? Right, it is. There's two different types. There's replacement cost value, which is the full replacement cost of your home based on current market conditions, meaning all your possessions would be replaced at current value. But many...

policies are written with what's called actual cash value, ACV, and that factors in depreciation. It is a cheaper policy in terms of overall cost of the premium, but you get a lot less coverage. So you have to be really careful and understand what type of policy you have. And you can make changes. That's the important point. If you realize you have actual cash value and you would rather have replacement cost value, you could change that. However,

Once a storm watcher warning is issued for your area, you typically can't make changes. For example, in Florida now, nobody can make changes to their policies. Once the first storm watches went up for Hurricane Milton, you are locked in through the end of the storm. So you can't run to your insurance agent the day before the storm may strike Florida and say, I want to change it.

to replacement cost value. You can't do that. You need to plan ahead. And we always recommend doing an annual insurance checkup. No matter where you live, do a checkup with your agent, review your policies so you understand the coverages, identify gaps, make changes. Don't wait until the storms are on their way to your area.

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Custom window coverings in the world. Blinds.com is the GOAT. Shop Blinds.com right now and get up to 45% off select styles. Rules and restrictions may apply. When people are evaluating, if they do, what is a mistake most people make when they think they're covered, but they're not as covered as they believe? One of the biggest mistakes

factors we've seen in recent years is the replacement cost values, dwelling coverage in your policy, coverage A. Many people think they are well protected there. But if you have not updated your policy in recent years, you could have a huge gap. The Insurance Information Institute analyzed three years of data, 2020 through 2022, that showed a cumulative replacement cost increase of 55%.

due to supply chain disruption, escalating cost of construction materials and labor. You could have a large gap thinking, oh, I have this great policy, but if it's outdated, it's not going to be enough to cover the replacement cost of your home if it's severely damaged or destroyed. So you'd need to make sure your replacement cost is up to date, covers current inflationary impacts, and you will be fully

financially protected from the next hazard that comes your way. But you're going to cost, it's going to, your insurance will cost a lot more or how much more are we talking? It depends. It really varies. I mean, I know personally, I increased my replacement cost value a few years ago.

And I increased it by a couple hundred thousand dollars. It didn't cost that much. It wasn't that much of a difference. So it really varies. You have to kind of look at all the factors. You might want to adjust your deductibles higher, both your standard deductible and your hurricane deductible in those hurricane prone states. Raise them to reduce the cost of the increase. But the bottom line is you don't want to have a policy that has a $200,000 gap.

Nobody wants to have that because you file a claim and then realize you're not going to get enough money to rebuild your home. We've seen this in wildfires, tornadoes, hurricanes, and this has been happening for several years. This isn't a new phenomenon. You want to make sure your policy is as solid and as comprehensive as possible to give you the financial protection you need to recover from a

catastrophe. What do people do in some of these? We talked about the flood issue. What do these people do? They don't have the insurance. Their place is gone. What do they do? FEMA will provide emergency grants in those situations.

However, it may give you some funds to get back on your feet. It's not going to rebuild your home. FEMA grants are not a replacement for insurance. We always tell consumers this. It's a starting point. It will help you with some emergency family expenses. It's not insurance. You need to own your risk and make sure you understand the risk in your area and take the steps to have adequate financial protection.

And we certainly never want to shame storm victims, especially with a catastrophe as broad as Hurricane Helene. But it's just really sad to see so many homeowners will have a very difficult time to recover in the areas that were hard hit by flooding because they had no flood insurance. It makes it really difficult for

to recover from these types of hazards when you don't have financial protection through insurance. With so many storm victims from Helene and so many more about to deal with Milton, how much of a backlog are we talking about for insurance companies? I mean, it's going to be difficult to process all these claims timely. It would seem, maybe I'm wrong,

Insurance companies are well prepared for catastrophes. In fact, many of the regional and national insurers have teams they bring in to the hardest hit states, so they're on the ground working directly with their customers. Insurers

prepare for this type of scenario, these worst case scenarios where there would be multiple disasters simultaneously, whether it's multiple hurricanes, a major hurricane and a major wildfire at the same time, a tornado outbreak somewhere in addition to these other hazards, they are prepared and

you could rest assured that your insurance company will act as your financial first responder and will be ready to serve you and begin to process your claim as soon as you are ready to file it. But you have to file it quick, right? I mean, this is going to be a long line. Potentially, yes, depending on the volume of claims, certainly. But you have to remember there are many insurance companies at all levels, national, regional companies, right?

Not everybody's filing with the same company. Certainly, the national major insurers have more support staff than regional companies in general, but all companies are prepared to

to handle your claims. And at this point, we're not concerned that there'll be a backlog that you'll have to, you know, using that term, get in line. We feel that the insurance industry is very well prepared for multiple storms is what the case we're seeing right now playing out with Helena and Milton being so close in terms of the timing. Flood insurance. It's not something that a lot of private companies offer, right? This is more of a federal program?

Well, actually, the private market has grown substantially. Right now, about a third of all flood policies in the U.S. are written by private insurers. It has grown quite a bit. There are dozens of private insurers offering the coverage from major global insurance companies to more national or regional companies that specialize in flood. There are options, and that's why it's so important to go to your insurance

agent, get quotes, get a quote from the federal program, the National Flood Insurance Program, as well as some quotes from the private market, what's available in your market. And sometimes the private market policies are less expensive, and they offer more coverage, including something really important called loss of use, which is additional living expenses. National Flood Insurance Program policies do not offer that. Whereas standard home policies have that, NFIP does not, but private flood has added that to

to their mix of additional coverages. And it's worth taking the time to get some quotes to compare and see the cost differences as well as the overall coverage differences. So bottom line, no matter where you live, review, right? Review, prepare for flooding. It floods just about everywhere in the country. 90% of U.S. natural disasters involve flooding. I don't care where you live. If it rains at your home,

It could flood. That's just the best takeaway message I could give at this point. Don't think you are not at risk from flooding. It could flood anywhere. And if you're in a typical low to mid-risk location, you're going to pay a very reasonable cost for flood coverage. Mark Friedlander, Director of Corporate Communications with the Insurance Information Institute. Thank you very much for joining us. Thanks so much for having me.

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