A Stormy Insurance Forecast for Coastal Homeowners

In many regions where insurance coverage is available, blanket coverage is being replaced with exceptions for water, wind or other kinds of damage. In some cases, specific deductibles — sometimes as high as five percent of a home's value — apply to these catastrophes. Be sure you understand these changes. They can lower your premium and also leave you financially vulnerable, should you need to a make a claim.

"Don't just look at the price," Schrad says. "If the deductible has changed, that's a significant change to the policy."

As the news coverage of 2005's disastrous hurricane season made clear, home insurance policies do not cover flood damage — it must be purchased in a separate policy. Schrad says insurance pros use a simple formula to determine the difference between flood and wind damage.

"The general rule of thumb is, if the water comes from the ground, up, it's flood," he says. "If it comes down, it's rain or wind."

Flood insurance is backed by the US National Flood Insurance Program (NFIP), but purchased through private insurance agents, including, possibly, your own current insurance agency. NFIP coverage caps out at $250,000 for residential structures, but additional coverage above that figure may be available through private carriers.