DURING HURRICANE SEASON;
BE SURE YOU'RE SECURE

Every year, Puerto Rico faces the threat of hurricanes, floods due to heavy rains and other weather events that can cause extensive damage to property. For this reason, we call on citizens, including homeowners, businesses and businesses, to review and update their property insurance policies in advance.

What can citizens do?

• Check your current coverage:
  Many people think their policy is up to date, but they haven't considered recent changes to their property. Remodeling or expansions change the replacement cost of your property. It's important to make sure your insured value is sufficient to cover the property's replacement cost.
• Understand replacement cost:
  Replacement cost is not the same as appraised value. It refers to the money needed to rebuild your property as is, regardless of market value. If the replacement cost calculation isn't accurate, your company will apply a reduction to the claimed loss amount, known as coinsurance.
• Protect the contents of your home or business, too:
  In addition to structural coverage, you should consider contents coverage. This includes protecting your personal belongings, such as furniture, fixtures, or business equipment. Taking an inventory and keeping photos and receipts for your belongings or equipment can help when filing a claim.
• Read the exclusions:
  It's important to pay close attention to the policy's exclusions. Policies may exclude certain specific damages, such as those caused by flooding. Knowing your policy's exclusions is essential to avoid surprises when filing a claim.
• Check your insurer's financial strength.
  Make sure the company you purchase your insurance from has a good credit rating. This gives you greater confidence that your insurance company has the financial capacity to respond to claims when an accident occurs. You can check this information through credit rating agencies such as AM Best.
• Don't wait until the last minute:
  ​Once a hurricane warning is issued by authorities, insurers temporarily close the market, meaning you won't be able to buy a new policy or modify your policy coverage. That's why action is needed before a storm or hurricane is announced.
• Also check your commercial policy if you have a business:
  ​It's essential for business owners to check their roof for buildings, contents, machinery, and inventory. They must also ensure that they are protected against loss of income if their operation is interrupted by a weather event.
• Consider a flood policy:
  ​Property (home or business) policies don't cover flood damage, so flood insurance is purchased separately. If you live or your business is located in an area prone to flooding, or even in areas that are not traditionally considered “flooded areas”, it is advisable to purchase this type of cover to protect your belongings against the risk of flooding.
• Get a good understanding of your deductible:
  ​The deductible is the amount of money you must pay or cover before insurance starts paying you. The higher the deductible the premium is reduced, however, it is important to know what that amount is and to select a deductible that you can pay in the event of an accident.
• Do an annual review of your policy:
  ​The policy should be reviewed annually to ensure that your coverage limit remains adequate as the replacement cost of your property and the value of your belongings change. Maintaining an adequate coverage limit is crucial because it places the limit of your protection on the insurance cover.
• Ask questions and clarify doubts:
  ​Don't hesitate to ask your insurance producer or authorized representative questions. They can explain the terms and conditions of your policy to you and help you make informed decisions.
• Learn how to claim:
  ​If you are damaged, you should collect as much information as possible: before and after photos, invoices, a description of what happened and an estimate of the damage. It is always recommended to contact your insurance producer or authorized representative, who can guide you through the entire process.

What if the property has a mortgage?

Many people, as required by their financial institution, are required to maintain a property policy for the term of their mortgage, commonly known as a “Hazard Policy”. It is important to know that even after the term of your mortgage is over, it is advisable to keep your property insured. Without insurance, you would be assuming 100% of the risk of any property damage. This could mean losing your home or business completely without insurance should a claim occur.

Why is it so important to review your policies now?

• Because construction costs change: Over time, the replacement value of the property changes due to inflation factors and, if the policy is not revised, the coverage limit may be insufficient.
• Because the value of your property may have increased.
• Because areas at risk of flooding can change, and your property could be in a different category without you knowing it.

The best time to review your home or business property insurance policies is now, when there's still time to make the necessary adjustments. Insurance is a key tool for protecting your property and financial well-being against the dangers of loss and damage caused by weather events.

For more guidance on how to prepare and review your policies, we encourage you to contact your insurance producer or authorized representative. Purchasing an appropriate hurricane insurance policy will provide you with financial protection and peace of mind at a time when the risk of extreme natural events is higher and more frequent.