While homeowners’ policies can help defray the costs of staying away from home when coverage is triggered by damage to the residence, they don’t provide coverage when there is no damage. By adding a mandatory evacuation endorsement to the homeowners’ policy, which is offered by a number of insurers for wildfires and named storms, insureds can ensure they can defray extra expenses even when they are lucky enough to return and find their home undamaged.
When a fast-moving wildfire threatens their homes, residents may have mere minutes to seek safety. It’s an all-too common scenario as California suffers through another devastating fire season. More than 38,000 people fled their homes near Redding in northern California this summer as one of the largest fires in state history burned more than 177,000 acres and destroyed more than a thousand homes, so far.
Residents may have more warning when a hurricane approaches, but hundreds of thousands may be ordered to leave their homes to seek shelter. When Hurricane Irma threatened Florida last year, some 6.5 million residents found themselves under mandatory or voluntary evacuation orders.1 Half a million Florida residents were ordered to evacuate from Fort Lauderdale’s Broward County alone, and nearly 800,000 Texans faced mandatory evacuations for Hurricane Harvey.2
After the disaster is over, the fortunate ones return to find their homes undamaged. But mandatory evacuations mean that people have to find somewhere to stay until the all-clear is given. That adds up to unexpected costs for lodging, travel and loss of use. Some Redding residents, for example, were allowed to return to undamaged areas after four days, while others had to wait longer. After Hurricane Sandy, some New Jersey shore residents waited more than a week before they were allowed to even visit their homes. While homeowners’ policies can help defray the costs of staying away from home when coverage is triggered by damage to the residence, they don’t provide coverage when there is no damage.
AN EXPERT'S TAKE
“Mandatory evacuation coverage is beneficial for those required to leave their home for multiple days or weeks. They accumulate hotel charges and travel expenses but return to a home with no damages, which is great, except without a loss to the home there’s nothing to trigger coverage. So the insured won’t receive payment for loss of use. With Mandatory Evacuation coverage, the insured can receive payment for expenses without having a loss to their home.”
Allison Talus
SCU Regional Director – Western States
Personal Lines Practice Group
Homeowners can protect against the extra expenses they incur by adding a mandatory evacuation endorsement to their homeowners’ policy, which is offered by a number of insurers for wildfires and named storms.
Mandatory evacuation coverage typically begins 24 hours after a mandatory evacuation order and can extend up to fourteen days depending on the carrier. The coverage is very affordable, sometimes as little as $50 in additional premium. Coverage is also available for loss of rents for people who own short-term rentals when the property has been booked and the mandatory evacuation causes the owner to lose that income.
Wildfires pose a growing threat to suburban areas - as fires this year and last have proved. On the East and Gulf Coasts, Hurricanes Harvey and Irma heralded a return to more damaging hurricane seasons after a decade of quiet. Residents in at-risk areas need to prepare ahead of time for possible evacuations. That should include adding mandatory evacuation coverage to their homeowner’s policy to better protect themselves financially when they seek shelter from a natural disaster.
ENDNOTES
- Hurricane Irma: By the numbers, ABC News, Sept. 12, 2017. See: https://abcnews.go.com/US/hurricane-irma-numbers/ story?id=49677062
- Harvey victims begin returning home to damage and uncertainty, NBC News, Aug. 31, 2017. See: https://www.nbcnews.com/storyline/hurricane-harvey/harvey-victims-begin-returning-home-damage-uncertainty-n797946