June 19, 2007 — Many homeowners mistakenly believe insurance protects them from a wide array of perils, according to research by the National Association of Insurance Commissioners (NAIC), so government officials are urging them to check their policies before a hurricane hits.
In reality, many standard policies do not cover flood damage, water-line breaks, mold and other perils that may result from a hurricane, according to a news release from the office of Lt. Gov. Gregory R. Francis. By virtue of his position, Francis is the commissioner of insurance and regulates the insurance industry in the territory.
NAIC’s research found that 33 percent of those surveyed erroneously believed their standard policies covered flood damage caused by hurricanes, Francis said. As an example, he cited many victims of Hurricane Katrina who lost claims because they lacked proper flood insurance.
“As the 2007 hurricane season moves forward, I strongly encourage all residents — particularly those in flood-prone areas — to check their policies to see if they are properly covered,” Francis said.
Information about flood insurance is available through the website floodsmart.gov.
The NAIC survey also revealed other homeowner misunderstandings relating to common loss situations, none of which are covered by standard homeowners insurance policies:
— 68 percent think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered;
— 51 percent think damages from a break in the water line on their property supplying water to their home are covered;
— 37 percent think damages from a break in the sewer line on their property that connects to their municipal sewer system are covered;
— 35 percent think damages from earthquakes are covered;
— 34 percent think damages from mold are covered;
— 31 percent think damages from termites or other infestation are covered; and
— 22 percent think pets stolen from or injured on their property are covered.
Virgin Islanders should review their policies closely and ask detailed questions of their insurance agents, Francis said.
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