Earthquakes, hurricanes and smart insurance moves

August 26, 2011

What a week: An earthquake gave the East Coast a jolt and now a hurricane is bearing down.

No one’s immune. Virgin Atlantic mogul Richard Branson’s compound on Necker Island in the British Virgin Islands was destroyed by fire this week after being struck by a Hurricane Irene-connected lightning bolt.

And, according to The Chubb Group of Insurance Companies, lightning can strike twice. So there’s no such thing as being too prepared.

Given that the weather is in motion, it’s time to deal with most folks’ biggest investment — their homes. So, whether you’re going to hunker down or be evacuated, batten down the hatches.

The questions you should be asking, according to Scott Spencer, senior vice president and worldwide appraisal and loss prevention manager for Chubb Personal Insurance, are: “Where are you going to go? What are going to take with you? And how you are going to secure your property?

If you have the time, check your policy to see what coverage you have for evacuation. Spencer said some policies (Chubb’s do) cover hotel costs when you have to flee for your own safety.

He suggests leaving behind fragile items — things more likely to damaged in transit — and move them to an interior location with some degree of protection from potential wind and water entering the home. “You shouldn’t take with you your fine arts. I wouldn’t recommend you take your priciest art work with you as you go down I-95.”

Some other important steps he suggests:

  • Bring outdoor items, such as porch furniture indoors so they don’t turn into projectiles. “If you can’t move patio furniture indoors, put it in a swimming pool. It’s a better place than leaving it on the patio.”
  • Unplug your major appliances and electronics to avoid power surge damage when electricity goes out and then comes back on.
  • Seal all windows and doors (leaving a window open a crack as an aid is an old-wives tale) and place towels and blankets against doors and vulnerable windows to help mitigate any water that might enter.
  • If you have a car in your garage, back it up until it is touching the garage door to help prevent the door from being blown in.
  • Take with you cash, your medications and your insurance policy, so it’s handy if you have to make a claim.

For high-net worth individuals there are other issues to consider.

Bob Courtemanche, division president of ACE Private Risk Services, recommends high net worth clients go a step beyond the normal advice of have battery back-up for a sump pump.

Wealthier homeowners are more likely to live directly on the coast and are more vulnerable when it comes to storms like this and have more at stake, he says. That’s why they should have a generator connected to their homes that is fueled through a gas line. That would help ensure that sump pumps and other systems in the homes keep running even when power is out for an extended period.

An expensive wine collection, for instance, could be devastated by a temperature change from a power failure knocking out the controlled environment it has been in.

Courtemanche says it is particularly important for wealthy homeowners to regularly update the worth of items on their valuable articles rider. You don’t want to get $10,000 for something lost in a storm that’s worth $50,000, just because you never updated the value.

It’s a little late to figure out what you need to change in your homeowners insurance policy, but there’s still some advice so you’re ready for the next disaster down the road.

Dale Tomlinson, assistant vice president and premier account specialist for ACE Private Risk, notes, “In most coastal areas, not only for the high net worth client, there’s usually a hurricane deductible. (They need to) understand what their coverages are — the differences from the wind being blown to flooding.”

Flood insurance is separate and often overlooked, leaving many homeowners at risk of only having part of their loss covered.

“Those are things that are often times overlooked until the last minute,” Tomlinson says. “You can’t get insurance at the 12th hour. It’s mandatory they understand this up front.”

Spencer, from Chubb, noted that it’s worth shopping around for insurance and determining exactly what you covered for and what you’re not.

“Some people think all insurance policies are the same,” he says. “They’re as different as cars.”

One comment

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I think having good insurance coverage for all the expensive items in the house, especially insurance for every member of the family is important. What else is important is that these documents are protected from the elements and possibly waterproofed. I would definitely keep a copy of important family documents with a trusted family member somewhere else too. I have seen people lose everything in major disasters, and that has taught me to be extra cautious when it comes to valuables.

David –

Posted by DavidDoors | Report as abusive