Maryland Insurance Administration Urges Homeowners to Consider Insurance Protections Before Upcoming Hurricane Season

Insurance to your home’s value and flood insurance are key.

Baltimore, MD (April 21, 2007)… Maryland Insurance Commissioner Ralph S. Tyler today is reminding consumers of the upcoming hurricane season (starting June 1) and encouraging consumers to take action to protect their families and their property in the event of a storm.

Colorado State University’s Department of Atmospheric Science is again predicting a “well above average” Altantic hurricane season. Consumers can act in two ways now to protect their property and their financial security: make sure that their property is insured to its full value and consider purchasing flood insurance in advance of the 30-day waiting period.

“You do not have be a financial victim of a storm if you have prepared by having the proper insurance in place,” said Tyler. “Making sure that you have an adequate amount of homeowner’s insurance and considering purchasing a separate flood insurance policy are the two best steps consumers can take to be prepared.

You can not wait until the storm is coming. Act now to protect your investment in your home and its contents.” Insure to Value As a first step, make sure you are “insured to value.” This means that you have purchased an amount of homeowners’ insurance that reflects the actual cost to rebuild your home – not including the land. This insurance value involves an in-depth evaluation of your home – from the types of construction methods to the types improvements you have in it. Consider this: two houses in the same development may have the same layout, construction and location, but could be worth very different amounts if one has granite counters, marble floors, a spa tub, and professional-grade stainless steel appliances.

The good news is that there are online tools to help consumers figure out what the replacement cost of their home is. The MIA has created a page on its web site dedicated to this issue with links to at lest three sites where consumers can register and receive this kind of evaluation for nominal fees.

The consumer is asked a host of questions about their house and is then provided a value based on all the factors available.

“This can be valuable information when shopping for a new policy or when updating a policy,” said Commissioner Tyler. “Consumers should not be afraid to take this evaluation to their insurance agent to be sure they are buying a policy for the full value.”
Consider Flood Insurance

In addition, the MIA reminds consumers there is typically a 30-day waiting period before a new flood insurance policy becomes effective. Consumers should consider purchasing this coverage now in order to be protected when hurricane season begins on June 1. Flooding is generally not covered by your homeowners insurance policy. To prtect against flooding, you must purchase a separate policy. (Please note: Flood insurance policies donot automatically cover the contents in your home. If you wish to protect your personal property against flood damage, you will need to purchase a second flood policy for contents.

Flooding from hurricanes and thunderstorms can cause significant damage and can happen in any location. Historically, hurricane season flooding is one of the most costly natural disasters affecting Maryland. In recent hurricane seasons (2002-2006), insured flood losses in Maryland totaled approximately $177 million. Residents should learn their flood risk and take steps before the next storm to protect their home or business from potential flood damage.

Although storm surge caused by hurricanes and tropical storms can wreak havoc on coastal areas, some of the most damaging floods occur hundreds of miles from the shoreline, days after the storm’s initial landfall. As hurricanes and tropical storms move inland, torrential rains and high winds intensify the risks of flooding.

National Flood Insurance is available to renters, business owners and homeowners. The average flood insurance policy premium is around $500 a year. In low-to-moderate-risk areas, homeowners can protect their properties with lower-cost Preferred Risk Policies (PRPs) that start at just $122 a year. Individuals can learn more about their flood risk by visiting www.FloodSmart.gov or calling 800-427-2419. Consumers may also download an MIA brochure entitled: An Insurance Preparedness Guide for Natural Disasters. For Marylanders without web access, the brochure may be ordered by calling 1-800-492-6116.

Other helpful State and Federal websites include www.mema.state.md.us; www.nhc.noaa.gov; and
www.floodsmart.gov.

The Maryland Insurance Administration (MIA), founded as the Maryland Insurance Division in 1872, is an independent State agency located in downtown Baltimore. This agency regulates Maryland’s $26 billion insurance industry and makes certain that insurance companies, health plans and producers (agents and brokers) comply with Maryland insurance law. The MIA also licenses over 110,000 producers and approximately 1,500 insurance companies, regulates insurance rates, monitors insurer solvency, investigates consumer complaints and travels
across the State providing consumers with educational materials on insurance. These materials may also be found
at www.mdinsurance.state.md.us.

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