Is your home insured for winter storm damage?

The recent storm in Buffalo, New York, dumped over seven feet of snow there, and as warm temperatures followed, the risk of local flooding due to rapidly melting mounds of the white stuff followed. Now folks in the Northeast are bracing for another winter storm over the Thanksgiving holiday.

If you own a home, rental property or a business, you need to think about how your property is protected if it's damaged due to winter storms. The weight of accumulating snow can collapse roofs, ice buildup can cause melting snow to seep under shingles causing roof leaks and melting snow can cause water to leak into basements, causing significant damage.

Fortunately, most home and business owners who carry modern insurance policies can take comfort in the fact that their policies cover damage caused by winter storms. According to USAA, if property damage is "caused by the weight of ice and snow, damage to buildings is typically covered, subject to your policy limits for this type of damage. But structures that are not buildings, such as fences, swimming pool covers, etc. aren't covered if winter weather causes them to collapse."

If you're unsure about your coverage, then now is the time to get out a copy of your policy and take a few steps to make sure your property is protected by having adequate insurance.

Check Dwelling Limits

Having the right type of insurance to cover such risks isn't the end of it. When you are a homeowner, it is your responsibility to make sure you have sufficient dwelling loss limits set in your policies (so the policy will pay enough to rebuild your home). That's because most policies will pay claims up to a stated percentage of the dwelling limits of your policy, which can range from 120 to 130 percent. If it costs more than that to repair the damage, the policy will not reimburse you for the additional costs.

You also want to ensure that your insurance covers other things such as loss of use, loss due to floods and that your home's contents will be covered no matter what the reason for the loss.

Cover Your Contents

Homeowners should have a type of home insurance coverage called an HO-5 policy. Only this type provides replacement cost coverage for contents damaged or lost due to any and all stated risks. This is particularly important if you have a larger home, expensive furnishings, jewelry, art, or a home office.

Cover Loss of Use

One thing most homeowner's policies cover is "loss of use." If you are forced to evacuate your home and pay to stay in a hotel, then that cost and other related living costs are generally covered up to a dollar limit that is typically about 30 percent of the overall policy dwelling coverage. So if your policy dwelling limit is $250,000, you may be entitled for up to $75,000 in reimbursement for your expenses associated with your loss of use.

Vacation Home Coverage

People who own vacation homes and second homes have special insurance needs to think about. When buying or updating homeowners coverage on a second home, be sure to disclose to the insurance company that the home is a vacation home, the amount of time you occupy it and if you also offer it for rent when you aren't using it. Coverage for vacation or second homes should include additional liability coverage, loss of use and loss of rental income benefits.

If you have this feature and have a loss, the insurance policy will pay for you to rent another vacation home. It will also reimburse you for the rental income you could have received while the home is unable to be rented out.

Flood Insurance

Every homeowner should know by now that standard home insurance policies don't cover flood damage. Homeowners in flood zones should buy flood insurance under the National Flood Insurance Program through the Federal Emergency Management Agency, and any claims are often serviced by your insurance company. These policies can range from $400 to up to $3,000 per year, with the average flood insurance policy costing about $600 per year. The maximum coverage for building property is $250,000 and $100,000 for personal property. Losses are covered for Actual Cash Value, not replacement value. If you need more flood insurance coverage, you'll have to get it through private insurers and will have to check for companies in your state that can provide policies with higher coverage limits.

If you haven't reviewed your home insurance policy in a few years, pull it out and read the policy coverage summary. Think about how the limits in your policy would apply if you experienced significant damage to your home. If you aren't sure about your coverage, call your agent or insurance company and review the policy with them.

  • Ray Martin

    View all articles by Ray Martin on CBS MoneyWatch»
    Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.