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Does home insurance cover damage from storm surge?

One phrase – “storm surge” – has blanketed news coverage about Hurricane Sandy. But just what is storm surge? And does your home insurance cover damage from it?

Here are answers to some key questions about storm surge and home insurance.

What is storm surge?

Storm surge is caused by water that’s pushed toward the shore by storm winds. It can increase the normal high tide by 15 feet or more. In addition, wind-driven waves on top of storm surge can trigger severe damage in coastal areas. storm-surge

“The stronger a hurricane’s winds, the harder its punch. But it’s the water that gets driven ashore that causes much of the damage,” insurance company USAA says.

Powered by the force of a wave, storm surge packs much more energy than the floodwaters of a rising river. In fact, storm surge is the No. 1 killer of people in a hurricane.

“It only takes a wave that’s a foot-and-a-half high to equal or exceed the force of a 120-mile-per-hour wind,” Tim Reinhold, senior vice president for research and chief engineer at the Insurance Institute for Business & Home Safety, says in an article on USAA’s website. “The forces of the waves just dominate over everything.”

Does my home insurance policy cover damage from storm surge?

No. A standard home insurance policy normally doesn’t cover damage caused by storm surge or flooding. To be covered for damage from storm surge, you’ve got to buy separate flood insurance. Most people purchase flood insurance through the National Flood Insurance Program.

If I have flood insurance, how much coverage do I have?

A policy from the National Flood Insurance Program (NFIP) provides coverage of up to $250,000 for your home’s structure. Keep in mind that contents coverage isn’t automatically included in a standard flood insurance policy; you’ll have to pay to add it. Contents coverage pays up to $100,000 for your personal possessions. The NFIP policy provides replacement cost coverage for home’s structure, but only actual cash value coverage for your possessions.

What is replacement cost coverage?

Replacement cost coverage pays to rebuild your home like it was before the damage occurred.

What is actual cash value coverage?

Actual cash value is replacement cost coverage minus depreciation. The older your possessions are, the less money you’ll get if they’re damaged.

My insurer denied my claim because of where my home is located and said the damage was caused by storm surge. Is that right?

Whether a claim is paid depends on the language in your home insurance policy or policies. Insurers can’t make blanket decisions and reject claims without investigating the facts. If you think your insurer unfairly handled your home insurance claim, file a complaint with your state insurance department.

Can I buy flood insurance now to cover damage from Sandy storm surge?

No. There’s a 30-day waiting period before this type of coverage takes effect. Therefore, don’t wait until the last minute to buy flood insurance.

Who’s at risk for damage from storm surge?

In the Atlantic Coast region, where Sandy landed, about 2.2 million homes are at risk of damage from storm surge; those homes are valued at more than $500 billion. Along the Gulf Coast, just under 1.8 million homes are at risk of storm-surge damage; those homes are worth nearly $200 billion.

How much damage can storm surge cause?

In the past, storm surge from hurricanes has destroyed large buildings and wiped out coastal communities. Just 1 inch of storm-surge water in your home can lead to thousands of dollars in damage and cleanup costs.