Today we’re diving into a standard homeowners insurance policy to see what it says about storm surge. More specifically, we’re answering the question as to whether hurricane coverage would cover storm surge if the storm surge is caused by a hurricane.
The short answer is …… it’s not covered.
A standard homeowners insurance policy, written on an HO3 policy form, used to be known as an all risks or an open perils policy. This terminology meant that claims were covered unless the policy had a specific exclusion excluding coverage for a particular situation. Many years ago, the terms all risks and open perils were dropped because the courts found that the terms were confusing to the consumer. The HO3 policy form is now known as a special coverage form which means that coverage generally applies unless the situation falls under a specific exclusion within the policy.
Now that the history is out of the way, let’s talk about exclusions.
The HO3 policy form has standard exclusions built into the policy. These exclusions include things like earthquakes, nuclear hazard, war, neglect among other things. Included in the exclusion section is – you guessed it – water damage.
The exclusion for water damage, when pertaining to rising water situations such as a storm surge, is more narrowly defined within the policy. And it says the following is excluded:
Floods, surface waters, waves, including tidal wave and tsunami, tides, tidal water, storm surge, overflow of any body of water, or spray from any of these, all whether or not driven by wind, including storm surge.
Now that last part is important – this means that even though the winds from a hurricane caused the storm surge, your hurricane coverage does not apply in this situation.
So what are you to do for coverage can it be added back into the policy?
The answer is you need to purchase flood insurance if you want coverage for storm surge. Just a few inches of water in your home from a storm surge can cause 10’s of thousands of dollars in damage to your home. Don’t assume that because you have hurricane coverage that you’re covered for storm surge. Purchase flood insurance to ensure you’re adequately covered.
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