The Basics of Your Storm Policy
It is important to know the kind of coverage you have
During storm season in Houston, TX, your commercial property may sustain some damage. Having storm insurance may help cover most of the costs of repairs. How much your policy covers depends mainly upon the kind of deductible you have and whether the damage is the result of a trigger event.
The deductible on an insurance policy is the amount you must pay before your insurance coverage takes over. There are several types of deductibles a storm policy could have:
- Mandatory, in which a specific amount is set by laws, regulations or the insurer
- Dollar, in which a set dollar amount is stated in the policy
- Percentage, in which the amount is equal to a certain percentage of the building's value
A lot of the insurance coverage for hurricanes and other storms that produce high winds and the potential need for extensive water damage repair requires a percentage deductible. If your building is worth $1,000,000, and you have a 5% deductible, you have to pay for $50,000 of the damage before your insurance company pays a dime. Some business owners opt for a higher monthly premium for their insurance policy in order to have a dollar deductible that would be more manageable in a time of crisis.
In order for your storm insurance to kick in, there has to be a trigger event. In other words, the National Weather Service must issue a warning or name a specific hurricane or tropical storm. A regular rainstorm that doesn't merit an official measure of intensity is not likely to be covered under this particular policy. Read your policy carefully to learn exactly what circumstances must occur for damage to your building to be covered.
It is important to know the kind of coverage you have. Understanding the terms of your storm insurance policy can help you prepare financially for potential threats