News | August 30, 2005

30-Day Waiting Period On Flood Insurance Should Make Property Owners Take Notice, Says IIABNY

Windstorm Deductible Also a Concern to Unsuspecting Consumers

DeWitt, NY - The initial devastation of Hurricane Katrina should serve as a reminder that property damage can occur at a moment's notice. The Independent Insurance Agents & Brokers of New York, Inc. recommends a careful review of homeowners policies with a licensed independent insurance professional in order to determine the proper course of action and ensure adequate coverage. Many consumers are not aware that there is a 30-day waiting period before a flood insurance policy will take effect. To make matters worse, many companies that insure Long Island properties require high deductibles for windstorm claims, forcing an unsuspecting consumer to pay thousands of dollars over the standard homeowner deductible.

IIABNY, a not-for-profit trade association representing 18,000 independent agents and brokers across New York state, is concerned that many property owners may not have adequate coverage for protection against sudden destruction such as what the Gulf Coast experienced this week. The Federal Emergency Management Agency, which administers the National Flood Insurance Program, points out that "Everyone lives in a flood zone." With the remnants of hurricanes and soon-to-be severe fall and winter storms, it is never too soon to review one's homeowners policy.

For instance, a standard homeowners policy in New York covers wind damage. "When water damage occurs as a result of wind damage, such as a tree falling on the house or shingles being torn off, then the subsequent damage is covered by insurance," said Kathy Weinheimer, IIABNY senior vice president of industry relations & education. "However, flooding by itself requires flood insurance, and unfortunately, there are many property owners who probably don't have that type of coverage." More immediately, it is important to purchase flood insurance in a timely manner because flood insurance requires a 30-day waiting period from the date of the application before it takes effect.

On Long Island, many policies have a windstorm deductible, which can be triggered by a number of weather variables such as wind speed. These deductibles are based on a percentage of the property value. "For the most part, consumers on Long Island aren't aware of these windstorm deductibles," said Weinheimer. "If storm conditions are such that the windstorm deductible is enforced, the consumer might have to pay three, four or even five percent of the property's total value before coverage begins, resulting in many thousands of dollars in costs to the consumer."

The complexities of protecting a major investment, such as a home, require a trained and licensed professional. Weinheimer added, "A major advantage of working with independent insurance agents and brokers is they represent many insurance companies. Based on the needs and income of the consumer, they can shop for the best coverage by offering a wide range of products."

SOURCE: The Independent Insurance Agents & Brokers of New York, Inc.