Irene Floods Homes And Insurance Market

Last month, Hurricane Irene delivered a few rude awakenings to some residents here on the East End. The result: many homeowner insurance policies do not cover flood damage. And purchasing flood insurance does not provide instant gratification, insurance agents say.

“It’s very important for folks to remember that there is a 30-day waiting period before it goes into effect,” said Hampton Bays-based Allstate insurance agent Ken Pagano. “You can’t buy it a day before a flood.”

The federal government insures homeowners against flood damage through the National Flood Insurance Program, which is administered by the Federal Emergency Management Agency (FEMA), Mr. Pagano said. Coverage for homes outside a flood zone—called a “preferred risk policy”—costs in the neighborhood of $400 annually, he said. But the closer to flood zones, the higher the cost.

According to the Insurance Information Institute, just 14 percent of homeowners nationwide have flood insurance, and the lowest coverage area—at five percent—is the Northeast.

Standard homeowners policies cover structural and water damage when a tree or wind puts a hole in a roof, knocks down a fence or breaks a window, allowing rain to come inside, Mr. Pagano said. But there is generally zero coverage for the structures themselves, or personal items, when the damage results from storm surges or rain flooding a basement.

Inland areas—those least expected to suffer from flooding—were some of the hardest hit by Irene.

“A lot of flood damage happens outside a flood zone,” Mr. Pagano noted. “A lot of people nowhere near flood zones get hit. This storm happened to pour so much rain into areas that are nowhere near the water, like Westchester and upstate. A lot of them have mountains and valleys, and the rain collects until they’re inundated with water. Lakes and streams that handle a small amount of water can’t handle 7, 8 inches of rain in six hours.”

Suffolk County is slated to make federal disaster assistance available to residents and small businesses in the wake of Irene, County Executive Steve Levy announced on Saturday in a press release. Residents will be eligible for a number of relief programs, such as Individual Assistance, which covers up to $30,200 for documented, non-insured losses; Public Assistance, which aids with municipal debris removal, emergency protective actions and the repair or replacement of disaster-damaged facilities; USDA food coupons and commodities; as well as disaster legal services and crisis counseling.

Other than flood damage, the big story with Irene was the trees, Mr. Pagano said.

“Trees on wires, trees on cars, trees on houses, trees on top of other trees,” he said. “The rule of thumb: if a tree causes damage to the house, a fence or structure on the property, it’s covered.”

But there is a caveat. Once winds exceed a tropical storm and cross into the Category 1 hurricane threshold of 74 miles per hour, the base deductible no longer applies, explained Bridgehampton-based State Farm Insurance agent Dermot Dolan.

Hurricane deductibles apply to hurricane-caused damage, and typically range from 1 to 5 percent of the insured value of a home. For example, a policyholder whose home is insured for $500,000 and has a 5-percent hurricane deductible will pay the first $25,000 to repair any damage.

“No one-size-fits-all there,” Mr. Dolan said. “It depends on the deductible that will not impose an economic burden on them if they have to pay it out. Generally speaking, it’s a much better picture for everybody, for all our clients, that this was not a hurricane. Deductibles are much lower.”

Storm protection isn’t only for homeowners, Mr. Pagano reported. It applies to renters insurance, too.

“Renters insurance is like a homeowners policy without the home part,” he said. “It covers the items inside, liability and additional living expenses.

Claims can take anywhere from a few days to a couple of weeks to process, depending on the severity of the damage, the agents said. When surveying damage, make a list and, if possible, take pictures before any cleanup. Hire a professional to take trees down from on top of cars and houses, and stay away from downed lines. Don’t let children play on fallen limbs as they may be on top of a live wire.

But the East End isn’t out of the woods yet, both agents warned.

“We’re still in the middle of hurricane season, so remain vigilant,” Mr. Dolan said. “Hopefully this is the worst we see this year.”

In preparation for future storms, inspect yards for dead or overhanging trees that could come down during another hurricane, said Mr. Pagano. He also urged homeowners to review their policies so they understand what damage is, and is not, covered.

“We’re getting a lot more calls coming in now,” Mr. Pagano said. “It’s on the front of everyone’s mind.”

To reach FEMA, call (800) 621-3362.