Houses and major storms

Q. I live in a hurricane zone, according to my insurance company, and they’re telling me I need a windstorm letter from a professional, but in checking my policy, I noticed that I’m not really covered for much, including water and wind damage. They don’t cover contents of the home, only structural damage, and with all kinds of limits it looks like I’m left to pay for most of the losses. I’m not sure that Irene was such a big deal, but I am concerned about the next one. What should I do to improve my chances in case of flooding and wind? Any ideas besides buying pumps or rebuilding out of concrete would be helpful.

A. First of all, the whole issue of insurance is really a game of odds. You’re betting that a storm will be devastating and an insurance company isn’t. But just in case they lose the bet, they get to pay you with your money, and only if they want to, since in my experience with insurance companies, they have been quick to under-pay and slow to come close to the total amount needed. Most homes are underinsured for the real extremes, and because home values have dropped, most people are paying higher premiums than their homes are now worth. Estimates for repair are now higher than home values.

Value is what someone will pay to buy your home. Construction costs are based on putting together a lot of parts plus labor and profit. Homes, just like cars, cost less assembled than if you went to a parts store, purchased all the individual pieces and assembled it yourself. Your policy, like many, needs tweaking to cover contents. Ultra policies are better at covering contents but will also cost a lot. The only other suggestion is to self-insure: put large sums in an account just for damage repair purposes and accrue enough money over time to cover any loss. I doubt banks holding mortgages would accept this, but it can hedge your bet.