Texas Hurricane Insurance

A sign outside of a hurricane-damaged house in Seabrook makes a plea to an insurance company in the aftermath of Hurricane Ike in 2008.

Marcio Jose Sanchez/AP file photo

A major hurricane can cause a lot of pain and damage, and part of being ready to recover is to have your finances in order.

Having information before, available cash during and a sense of direction after a storm all are vital parts of making sure that your savings survive a storm.

Before a storm

Owning a home comes with a lot of costs, not the least of which is homeowner’s insurance. However, what new homebuyers in coastal areas sometimes don’t realize is that typical homeowner’s insurance doesn’t cover windstorm damage.

Instead, local homebuyers must buy windstorm insurance through the Texas Windstorm Insurance Association, the state insurer of last resort.

“They have to have two policies instead,” said Alex Monteith, an insurance agent with the SMI Insurance Agency in Galveston. “It’s always kind of a shock when you get told about it.”

Costs from windstorm insurance can be a burden, Monteith said, and homeowners sometimes have to choose between having lower monthly payments and potentially have to pay for more of the damage caused by a storm.

“Lots of people have been increasing their deductible,” Monteith said. “Then, they’re responsible for all that damage.”

It’s important to get insurance before hurricane season, because once a hurricane enters the Gulf of Mexico, policies cannot be changed or bought.

Getting a windstorm policy also may require a homeowner to buy flood insurance. Windstorm insurance covers damage caused by wind, rain and hail. But flood insurance covers damage caused by rising waters and storm surge. The cost of flood insurance can depend on where you live and how much hazard mitigation has been done to protect a home, Monteith said.

The IRS also recommends cataloging possessions in a workbook and taking photographs of expensive items. Having such records can make things easier when filing damage claims, Monteith said.

During an evacuation

Some storms might be so dangerous that a city declares an evacuation. If that happens, it’s important to keep some financial tips in mind.

A major storm can knock out power, making people unable to get cash from ATMs or use credit cards to purchase goods and supplies. The U.S. Coast Guard suggests that people should have enough cash to sustain themselves for two weeks.

It also may be a good idea to purchase some travelers checks, which function like cash, but are a little more secure.

People should keep cash and checks in a secure, waterproof case along with other important documents — passports, insurance policies, identifications and bank account records — and take this case when evacuating.

After a storm

After a hurricane, particularly one that causes an evacuation, a resident may feel an urgent need to get back home, to assess damage and start repairs.

However, after a storm is over, depending on its severity, there may be a controlled re-entry into disaster areas. Generally, emergency responders will be the first allowed back into a city, followed by business owners of what officials see as “critical services” — grocery stores, gas stations and similar businesses.

After Hurricane Ike in 2008, Galveston used a “look and leave” policy for property owners to assess damage to their properties. The city does not plan to try that again, Charlie Kelly, Galveston’s emergency management coordinator, said.

“They were not leaving once they got here,” Kelly said. “That’s something we’ll never do again.”

Rather, evacuated people should wait for the city to declare an all-clear. After that happens, they can return, to begin filing insurance claims and starting repairs.

Many cities’ planning departments have lists of pre-approved contractors.

Property owners also should listen for state-of-disaster declarations. After a storm, the governor can request federal assistance, if the president has declared a state of disaster. The type of federal assistance can differ from disaster to disaster, but can include providing housing assistance, or a small business loan for repairs.

There are other tax breaks available from the state. In the event of a natural disaster, a person whose property is damaged or destroyed can claim an exemption from sales tax on labor charges to repair the damage, according to the Texas comptroller’s office.

Business owners also can request an extension on filing tax returns or to pay any taxes due. The extensions can be granted for up to 90 days, according to the comptroller’s office.

People who are left jobless because of a storm can file for disaster unemployment assistance from the Texas Workforce Commission, if the disaster directly causes the loss of a job.

Contact reporter John Wayne Ferguson at 409-683-5226 or john.ferguson@galvnews.com. Follow him on Twitter, @johnwferguson.

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