What You Need to Know About Windstorm Coverage

In high-risk areas, you can face equally high costs for wind coverage. But a few smart home improvements can help you save money.

If you live in a high-risk area for hurricanes, you may have special coverage rules for windstorms.

Until a few years ago, many homeowners in coastal Florida could get coverage only from Citizens Property Insurance, a company created by the Florida legislature as an insurer of last resort for high-risk homes after Hurricane Andrew devastated the state in 1992. Over the past few years, more Florida residents have been able to get homeowners insurance from private companies, says Chris Heidrick, an independent insurance agent in Sanibel, Fla. But homeowners insurance companies typically require a much higher deductible for windstorms in high-risk areas—sometimes as much as 5% of the insured value of the home. The typical windstorm deductible in Florida is 2%, which means that if you have $500,000 in coverage on your home, you’ll have to pay $10,000 out of pocket for windstorm-related damages before your insurance kicks in.

In Texas, residents near the Gulf Coast who have been denied coverage by at least one private homeowners insurance company can get windstorm coverage from the Texas Windstorm Insurance Association. Deductibles can range from $100 to 5% of the insured value. The TWIA provides coverage only for wind and hail; policyholders usually have separate homeowners insurance coverage for fire and other perils (and in certain flood zones, you may be required to get flood coverage before you can get TWIA coverage). You can add coverage for possessions and additional living expenses.

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If you live in a high-risk area, you can get significant discounts on homeowners insurance or windstorm coverage by installing impact-resistant glass or storm shutters and by using certain roofing materials. Heidrick recommends getting a wind-mitigation inspection before buying a house in a high-risk area, in addition to a standard home inspection. Some of his clients have cut their insurance premiums in half after replacing the roof and installing hurricane shutters.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.