Question: What auto insurance coverages do I need so that my car is covered if it's damaged due to a hurricane or tropical storm?
Answer: Collision and comprehensive coverages are needed as a part of your car insurance policy if you want your auto insurer to pay for the repair or total loss of your car (minus your deductible amount).
According to the National Insurance Crime Bureau, an estimated 230,000 vehicles were damaged as a result of Hurricane Sandy, which hit the United States in October 2012 resulting in significant damage to the Northeast.
Will we see the same kind of damage during the 2014 hurricane season?
Although seasonal forecasts are difficult to construct, Jason Lynn, senior vice president at WDT WeatherOps - Forecast Services, says that this year's hurricane season might produce some significant storms.
"Even though some form of an El Nino event is probable, which tends to reduce overall seasonal tropical cyclone activity, history tells us an alarmingly high number of El Nino seasons produce significant hurricane events that can affect the Gulf of Mexico or East Coast during short periods when windows of favorable conditions exist," says Lynn. "Drivers and businesses in hurricane prone states can expect fewer tropical cyclone threats affecting the coastline; however they should always remain prepared should a significant hurricane develop in the western Atlantic."
So how do collision and comprehensive come into play?
Collision covers your car if it's hit, or hits, another car or object, so if the rain from the storm causes you to hydroplane and crash your car, you could make a collision claim. However, the majority of damage to vehicles from hurricanes and tropical storms is from winds and water and thus would be covered under comprehensive coverage, which is also known as "other than collision."
Comprehensive covers your car not only for theft, glass breakage and fire, but also damages due to flood waters, hail and other natural occurrences -- such as hurricane-force wind gusts. That means if your car is flipped and damged by strong winds, comprehensive will typically cover that, too. The exact perils covered by comprehensive vary by insurer, so if you have this coverage (or want to add it) you’ll need to ask your auto insurance company about what specific situations and damages you can place a claim for.
A car insurance policy that consists only of your state's minimum coverages wouldn't be of any help if high winds tip a tree onto your car or floodwaters seep into your vehicle since bodily injury liability and property damage liability only cover others that you cause damage to in an auto accident, and don’t offer any protection to your own vehicle.
The National Hurricane Center (NHC) says a hurricane or tropical storm warning is issued when weather conditions (sustained winds of 74 mph or higher for a hurricane or sustained winds of 39 to 73 mph for a tropical storm) are expected somewhere in the specified area within 36 hours, and a watch is issued when these hurricane- or tropical-storm-force winds are possible within 48 hours.
This NHC information is significant because if a hurricane is forming, or already coming in your direction, and you want to place physical damage coverages on your car (you may be able to add comprehensive on its own, but many insurers will require that you carry collision along with comprehensive coverage), then you need to do so before a tropical storm watch/warning goes into effect -- or you may be out of luck since insurers can place restrictions on changes to policies or new policies during a storm.
Important information to know about auto insurance and hurricanes/tropical storms:
- Most car insurance companies put temporary binding restrictions into effect in areas that are under a hurricane or named tropical storm watch/warning. When the restrictions go into effect and how long they last vary from one insurance company to the next, as is what is restricted.
- Restrictions can also vary by state but typically can include not accepting any applications for new coverage as well as not accepting requests for the addition of physical damage coverages, increased limits, or the lowering of deductibles on existing policies.
- In general, the restrictions will usually go into effect as soon as an area goes into a tropical storm watch/warning and lasts until 48 to 72 hours after the watch/warning ends.
- If you have auto insurance in force that is set to expire during hurricane season, it’s best to renew or shop around purchase a new auto insurance policy early; that way a binding restriction won’t come into play.
- If you are buying a new car, try to avoid purchasing it if a storm is approaching and could restrict your ability to buy the car insurance coverage that you need.
- An application, such as the Red Cross Hurricane App, may help you monitor weather alerts so you’ll be aware of when you are able to start a new policy or add comprehensive and collision to your current policy.
If you have comprehensive on your vehicle and it's damaged during a hurricane or tropical storm, when it’s safe to go outside, take pictures of the damage and contact your auto insurance provider to make a claim, if the damage looks to be above your deductible amount. If the damage is less than your deductible, then there is no reason to make a claim since your auto insurance policy only starts to pay out after the deductible has been met.
Your auto insurer will likely tell you to take steps to prevent further loss (such as covering any smashed windows, or placing a tarp on the car). Not doing so could result in more damage being done that your insurer would deny coverage for due to your failure to take action and keep this additional damage from being done.
Often, hurricanes bring flood waters. Here's how the different types of insurance coverage come into play if you're caught in a flood:
Comprehensive insurance– If your vehicle sustains water or flood damage, you can file a claim under your comprehensive insurance coverage, which covers any type of damage to your car up to its actual cash value that's caused by natural disasters instead of accidents, says Penny Gusner, Insure.com consumer analyst.
Collision coverage—Collision comes into play if you hydroplane and flip your car or hit another car or a tree. Your claim will pay to repair your car or will pay the actual cash value of the car. You do still have to pay the deductible, Gusner says, whether the accident was your fault, someone else's or caused by the storm.
Gap insurance – This type of insurance comes into play if your car is totaled and you owe more money on your car than it's worth -- gap insurance will pay the difference. "For instance, if you owe $15,000 on your car loan but your car is only worth $12,000, gap insurance will reimburse your lender for the extra $3,000." You can get gap insurance from your car insurance company or from your car financing company, but it's usually more expensive from your lender.
Rental car reimbursement -- Depending on your situation, rental reimbursement coverage is a wise choice or a waste, says Gusner. If you have a second car or a way to get where you need to go without your car, you don't need rental coverage, she says. But if you'd be left stranded for weeks while your car is being repaired, it may pay to have it. "Rental reimbursement coverage is optional and pays you a certain amount of money per day or per week for a rental car to drive while your car is being repaired," says Gusner.