ALDOI Advises Coastal Residents to Check Coverages

Contact: Ragan Ingram


With the formation of Tropical Storms Ana and Bill, the Alabama Department of Insurance recommends that coastal homeowners make sure they have their documents in order should a storm affect the state, Commissioner Jim Ridling said. “For most people in Baldwin and Mobile counties, this is nothing new, but we do want to remind everyone of some basic information that applies during hurricanes,” Commissioner Ridling said. “If any Alabama citizen has questions, please feel free to contact the Consumer Services Division of the Alabama Department of Insurance.” Suspension of insurance sales: Most insurance companies doing business in Alabama will not bind coverage once a storm has passed either west of 80 degrees longitude, or north of 20 degrees latitude. Those points intersect directly south of central Cuba. Hurricane/Named Storm Deductibles: Many companies in Mobile and Baldwin counties apply significant deductibles for hurricane coverage on a percentage basis. The percentages usually run from one to five percent. Hurricane deductibles apply only when a hurricane has been declared. They do not apply during tropical storms. But some deductibles are for named storms – whether tropical storm or hurricane. There are some optional deductibles that run even higher. Review your policy and endorsements to determine what deductible your policy has. In almost all cases, the deductible applies if the loss occurs during the time period beginning with the issuance of a hurricane watch through the period 24 hours after the last hurricane watch or warning expires for the state. Floods: Homeowners and mobile home policies generally do not cover floods. Find out if you are in a Flood Zone and whether you are eligible to purchase Flood insurance through the National Flood Program. Call the National Flood Program at 1-800-638-6620 for more details. Please be advised that there is a waiting period for eligibility and that not all properties qualify for coverage. Co-Insurance: Some companies will not insure properties if you do not maintain adequate replacement coverage limits. Some companies will allow you to insure your structure for less than the value, but you may then incur a co-insurance penalty. Additions and other improvements to your property should be reported to your insurance agent to avoid under-insuring your property. Temporary Repairs: Most homeowner’s policies will pay reasonable and necessary costs you incur for temporary repairs to covered property to protect it from further immediate damage or loss. Be sure to keep all receipts. Additional Living Expenses: Occasionally, a home is uninhabitable because of storm loss. Be sure to note what length of time your policy covers for additional living expense and what responsibilities you have regarding keeping records of such expenses. Replacement Cost Value vs. Actual Cash Value: Even with full replacement cost coverage, the claim is initially settled on actual cash value basis. The difference is recoverable only when the item or property is replaced. Automobile Damage: Homeowners coverage does not cover damage to automobiles in garages or carports. It is covered by automobile insurance. Renter's Insurance: If you are renting property, the property owner's homeowners coverage does not cover your property. It is your responsibility to carry renter's coverage. The Alabama Department of Insurance can be contacted by email through its web site at, or by telephone at 800-433-3966. ###