Disaster Insurance in Georgia

Georgia is affected by several natural disasters, including floods, tropical storms, winter storms, heavy rains, wildfires, and tornadoes. Disaster insurance, also known as hazard insurance, is typically a form of protection for property owners. Disaster insurance in Georgia protects businesses and residences when natural disasters occur. The Office of Insurance and Safety Fire Commissioner licenses and regulates most insurance companies in Georgia. This office also investigates insurance fraud and inspects buildings to ensure fire safety. Note that although the Office of Insurance and Safety Fire Commissioner regulates most insurance companies in Georgia, the Federal Emergency Management Agency (FEMA) regulates and administers flood insurance caused by forces outside the insured property. For instance, FEMA will not protect against a flood event caused by a burst pipe or a leaky faucet.

In Georgia, some natural disasters are covered under a standard property insurance policy, while some require a stand-alone insurance policy. For instance, fire, wind, and hail are typically covered under a standard homeowner insurance policy, while landslides, tropical storms, hurricanes, etc., require stand-alone insurance policies. A standard residential or commercial property insurance policy will not protect against severe natural disasters. Therefore, you need to know what your insurance policy covers and its exclusions.

There are specific hazard insurance policies in Georgia, and it is imperative to purchase disaster insurance policies for the most prevalent disasters in your region. This is because your disaster insurance policy cannot be interchanged. For instance, if you purchased flood insurance and you experience a tropical storm surge, your insurance company is not liable to pay out any claim.

When it concerns protecting your buildings from natural disasters, it is important to understand what protection your insurance policy provides. Many property owners in Georgia incorrectly believe that flooding caused by a storm surge or a force outside the insured property is also covered by their residential or commercial property insurance, only to find out after disaster strikes that they were unprotected.

To avoid wrong assumptions in your insurance policy in the future, it is best to speak with a licensed Georgia disaster insurance agent to help break down and explain your insurance policy better. Also, as a property owner, you can search for your property address on the FEMA Flood Map Service Center to assess your flood risk and be well prepared.

What is Natural Disaster Insurance?

Disaster insurance, also known as hazard insurance, offers protection against unforeseen natural disasters that could harm resources and property. People who reside in or own businesses in areas prone to natural catastrophes must obtain disaster insurance. Due to climate change, the probability of weather-related disasters is likely to increase annually. Natural disasters can be financially destabilizing, but disaster insurance protects property owners from costly damage, hence the need for disaster insurance.

Do Disasters Need Insurance Coverage?

Yes. Disaster insurance is necessary to cover the cost of rebuilding or replacing damaged properties and other infrastructures after natural disasters. Natural disasters are devastating and may take a lifetime to recover from their effects. Disaster insurance ensures you don’t have to pay heavily out of pocket for damage repairs. For instance, in 2021, Hurricane Mindy affected southeastern Georgia, causing approximately $75 million worth of damages, leaving 23 people dead, and thousands homeless. Disaster insurance is necessary to ensure your residential or commercial properties are covered when a disaster strikes. FEMA advises property owners in communities to consider mitigating disaster risks in their regions, as this will reduce the extent of the damages if a disaster occurs. According to the National Institute of Building Science (NIBS), investing $1 in mitigating disaster risks will save $6 in future disaster costs. Disaster insurance is required to protect against paying costly repair bills out of pocket.

It is important to speak with a Georgia-licensed disaster insurance agent who can assess your disaster insurance needs and help you select the most appropriate and affordable coverage.

What Types of Natural Disasters are Common in Georgia?

The natural disasters common in Georgia include:

• Landslides: Due to severe weather conditions in Georgia, like high rainfall, there are increased levels of land instability and erosion (the two major causes of landslides). Like earthquakes, landslides are considered earth movements, and your insurance company will not cover them under your homeowner's insurance policy; hence you will need to purchase a stand-alone policy for it.

• Flooding: Georgia is affected by floods annually. According to the Georgia Emergency Management Agency (GEMA), 75% of the natural disaster losses the state has experienced since 1990 resulted from flood damage. These losses resulted in over $1 billion worth of damages. In 2009 alone, 20,000 houses and businesses were destroyed by flood, resulting in an estimate of over $500 million in damages. The major causes of floods in Georgia are heavy rains and overflowing rivers because Georgia is home to over 20 rivers. It is estimated that 1,170 river floods occurred between 1975 and 2006. Georgia’s sea levels are expected to increase by about 6 inches by 2031 due to Georgia’s sinking lands, thereby increasing floods in the state, especially in the areas along the coast. In addition, more than 10,000 properties and wildlife on the coastlines and barrier islands are at risk of being destroyed by tidal flooding. Flooding usually occurs from April to June in Georgia.

• Tropical Storms: Tropical storms are also known as hurricanes. Georgia is along the coast state, so it is at risk of tropical storms that form in the Southern Atlantic Ocean, Caribbean sea, and the Gulf of Mexico. The National Oceanic and Atmospheric Administration (NOAA) predicts an above-average hurricane activity this year 2022, with an expected amount of 14 to 21 named storms. According to the National Oceanic and Atmospheric Administration, tropical storms are sustained horizontal winds of over 70mph and can flatten anything in their path. Tropical storms occur at least once a year and are usually accompanied by thunderstorms. Therefore, it is essential to purchase sufficient hurricane damage protection. Hurricane season is from June 1 through November 30.

Some of the tropical storms that have directly or indirectly affected Georgia are:

• Tropical storm Lee in 2010, which resulted in an estimate of $2 billion in damages

• Hurricane Sandy in 2012, which resulted in an estimate of $70 billion in damages

• Tropical storm Andrea in 2013, which resulted in an estimated $80 billion in damages

• Hurricane Arthur in 2014, which resulted in an estimate of $1 million in damages

• Hurricane Matthew in 2016, which resulted in an estimate of $10 billion in damages

• Hurricane Sally in 2020, which resulted in an estimate of $7.3 billion in damages

• Hurricane Elsa in 2021, which resulted in an estimate of $1 billion in damages

• Wildfires: Wildfire season in Georgia runs from February to May. The Georgia Forestry Commission reported that Georgia experiences an average of 3,500 wildfires annually. According to the Insurance Information Institute, 2,139 wildfires were recorded in Georgia in 2021, ranking Georgia 7th among the top ten states that experience the most wildfires in the United States.

Fortunately for homeowners, every standard homeowner's policy type ranging from HO-1 to HO-5 provides coverage for damages caused by fire and smoke, meaning your home and belongings should be protected if a wildfire occurs.

• Tornadoes: Tornadoes are one of the most common natural disasters in Georgia, with an average of 26 occurrences annually. Tornadoes in Georgia occur during the late spring and early summer months. Tornadoes usually occur alongside wind, hail, and lightning; fortunately, these disasters are covered under a standard homeowners policy.

Contact a property insurance agent licensed in Georgia to discuss disaster insurance types common to your area.

What Types of Disasters are Insurable in Georgia?

Every natural disaster that occurs in Georgia is insurable, either under a standard property insurance policy or a stand-alone insurance policy. Listed below are some of the major insurable natural disasters in Georgia.

• Floods: Floods can have a lasting impact on both communities and individuals, with environmental and economic consequences. The immediate impacts of floods include loss of human lives, destruction of property and infrastructures, loss of livestock, and illnesses caused by waterborne diseases. Unless in special cases, property insurance covers flood damage originating from inside an insured property, like a flooded basement caused by a burst pipe. In contrast, the FEMA-administered National Flood Insurance Program (NFIP) covers the flood damage caused by extreme weather and from water sources outside the property.

• Tropical storms or Hurricanes: Tropical storms usually result in the mass destruction of infrastructure, livestock, vegetation, and loss of lives. Tropical wind storms are often accompanied by storm surges (an additional rise of water generated by a storm), winds, and flooding, which are not covered by the standard policy. Hence, additional coverage is required for them. The effects of a hurricane can be felt for several days and even months, so it is essential to be adequately prepared.

• Wildfires: Wildfire spreads quickly. It can be deadly and can burn for several days without stopping. Wildfires can destroy human lives and wildlife habitats while also polluting the air with poisonous emissions. More than 4.6 million people in Georgia live in areas with a high risk of wildfire.

• Tornadoes: Tornadoes have wind speeds of up to 300 mph. Such speed causes the destruction of properties, loss of lives, and wildlife habitats. A tornado typically starts from a thunderstorm, but not all thunderstorms produce tornadoes.

• Earthquakes: According to the Georgia Emergency Management and Homeland Security Agency, 15% of earthquakes are scattered in areas like Georgia. Although earthquakes are relatively rare in Georgia, several counties are still at risk. Earthquake activities in Georgia are usually affected by faults in the area of the coastal plane.

• Hail: Despite not being located in the nation's hail alley, Georgia nonetheless experiences a sizable amount of hail damage each year. Hailstones are solid precipitation that resembles ice pellets and may feel hard as ice when they fall. They develop when a thunderstorm updraft lifts raindrops or drops of water over the air's freezing point. How long a hailstone is hung above a cloud, catching more water droplets, determines the size of the hailstones. Long-suspended water droplets grow into a large hail size, while shorter-suspended droplets grow into tiny hailstones. Hail swaths provide evidence of hailstorms for researchers. A hail swath is a path that hailstones leave behind when hailstones fall. A thunderstorm can occasionally cause hailstones to fall.

To discuss disaster insurance in Georgia and to get a quote for disaster coverage, speak with a knowledgeable Georgia-licensed property insurance agent.

What Type of Disasters are Not Insurable in Georgia?

In Georgia, residential insurance provides coverage for natural disasters caused by windstorms, lightning, hail, wildfires, volcanoes, etc. However, note that a standard commercial or residential property insurance policy does not cover flooding outside the property, earthquakes, and tropical storms; those are covered by stand-alone policies in Georgia.

What are the Types of Disaster Insurance in Georgia?

Disaster insurance in Georgia protects residential and commercial property owners from financial losses due to natural disasters. Natural disasters are expensive events that could leave a lasting impact. They are expensive to cover out of pocket, which is why disaster insurance exists. Your property would be covered for a stipulated annual fee.

The types of natural disaster insurance policies available in Georgia include:

Earthquake Insurance

Most standard commercial and residential property insurance policies do not provide coverage for earthquake damage. Coverage for earthquakes can be purchased as a separate stand-alone policy. You can purchase earthquake coverage from the same insurance company that provides your property insurance. The average earthquake premium in Georgia ranges from $800 to $2,000 annually for about $500,000 worth of coverage. The exact price of your premium largely depends on coverage limits, deductibles, and several other factors, including:

• Distance to fault lines

• Age of the property

• The cost of rebuilding the property

• The materials used to build the property

Regardless of your coverage limits and deductibles, every standard earthquake insurance policy should cover the following aspects:

• Dwelling coverage: This provides coverage for your property, and extended structures like a garage or tool shed. If your property or the extension is damaged due to an earthquake, this coverage will cover the rebuilding or repair cost within the coverage’s limit.

• Loss of use coverage: This coverage pays for the additional expenses you may incur if you have to leave your property due to it being uninhabitable. It covers hotel bills, takeout bills, parking bills, etc.

• Personal property coverage: This coverage covers the repair or replacement costs of your personal property insured under your earthquake insurance if damaged by an earthquake. This option covers items like air conditioners, fridges, televisions, etc.

To determine how prone your region or community is to earthquakes, you can speak to a licensed disaster insurance agent in Georgia. You can also check how prone your region is to earthquakes by using the earthquake hazard map provided by the United States Geological Survey.

Flood Insurance

FEMA reports that about 20% of flood insurance claims come from low-risk areas. Although Georgia cannot really be termed an at-risk state for flood, the state has experienced significant flood events in the past that were caused by severe weather conditions like heavy rains. As a Georgia resident or property owner, you should know that flood happens when least expected, and without flood insurance, you will have to pay thousands of dollars out of pocket to cover damage costs. Listed below are the counties most prone to flooding in Georgia.

The counties listed above have high population densities; therefore, floods, no matter how small, will have a sizable impact on the population.

• Flood insurance is issued through the National Flood Insurance Program (NFIP). Georgia residents can also purchase food insurance through private flood insurers at nominal prices. According to NFIP, the annual flood insurance premium is $700, with the average price in Georgia at $732. The premium could go up due to the property’s location, elevation, actual cash value (ACV), age, coverage type, limits, and the policy’s deductible. Based on those factors, the cost of flood insurance varies per property.

Flood insurance in Georgia covers two main categories, including building coverage and content coverage.

Building Coverage

• Permanent cabinets and cupboards

• Electrical and plumbing systems

• Water heaters

• Furnaces

• Staircases

• Built-in appliances like washing machines

Content Coverage

• Televisions

• Air conditioners

• Art works

• Furniture

• Clothing

However, a flood insurance policy in Georgia does not cover the following:

• Vehicles

• Property outside the insured building

• Financial loss as a result of an interrupted business

• Additional living expenses

Windstorm Insurance

Windstorm insurance is an insurance policy that covers your property if it is damaged or destroyed by windstorms. Georgia has the 3rd most wind and hail claims, falling behind only to Texas and Illinois. A standard homeowner’s insurance policy provides windstorm damage coverage and costs around $1,300 yearly for $250,000 in dwelling coverage. A proper windstorm insurance policy offers the following coverage:

• Dwelling coverage: This covers the building and any structures attached to it, such as a tool shed or garage.

• Personal property coverage: This covers personal property within the insured building, like televisions, microwaves, air conditioners, etc.

• Other structures coverage: This covers structures on the insured property that are not attached to the main building, including a detached garage, fence, etc.

• Loss of use coverage: This covers the additional living expenses incurred due to your building being temporarily uninhabitable. It covers costs like hotel bills, grocery bills, etc.

Sinkhole Insurance

A sinkhole is a cavity deep under the ground caused by erosion. This cavity provides a route for surface water to disappear underground. Sinkhole insurance covers the cost of repair for sinkhole damage. The average repair cost after a sinkhole event ranges from $10,000 to $15,000. Sinkhole insurance covers the building and the personal property inside the building. Homeowners’ insurance policy covers the building itself, but it does not protect the land it sits on. There are two types of sinkhole insurance:

• Sinkhole loss coverage: This insurance covers man-made sinkholes, including those caused by construction or mining activities.

• Catastrophic ground cover collapse coverage: This will protect your property if it falls into a sinkhole and the foundation is destroyed. However, your building must be condemned by the local government agency to qualify for this coverage.

A standard sinkhole insurance policy should provide coverage for the following:

• Additional living expenses for when you have to move out temporarily due to repairs being done on your property

• Personal belongings inside the property

• Damage done to property

• Stabilization and repair of foundation

Sinkhole insurance will not cover the following:

• Swimming pools

• Parking lots

• Fields

• Decks

Do you Need Disaster Insurance in Georgia?

Disaster insurance protects businesses and residences from losses caused by natural disasters. Natural disasters may not strike often, but when they do, you can expect to pay a lot of money out of pocket. Standard commercial and residential property insurance can only protect against losses incurred from natural disasters like winds, hails, lightning strikes, and wildfires. Additional coverage is necessary to avoid paying for severe damages out of pocket. It is imperative to have the right insurance coverage to protect your property; else when disaster strikes, you may just find yourself stranded.

According to recent research from the Insurance Information Institute, there were 58,950 wildfires across the United States in 2020. The NFIP also stated that 40% of all claims filed between 2014 and 2018 were from property owners outside high-risk flood regions. With that in mind, it should be noted that an inch of copious amounts of water, floodwaters, or even rainwater can result in over $15,000 worth of damages. Also, there is a 30-day waiting period before a claim can be filed. Therefore, you need to purchase your insurance long before disaster strikes.

With climate change being an inevitable issue, weather conditions may worsen over time. Georgia is part of a string of “deep south” states that will experience the worst effects of climate change, with effects like submerging lowlands, severe flood events, and worse coastal flooding. Therefore it is essential to get relevant disaster insurance to be protected from the financial losses these disasters may incur.

Note that after a disaster warning has been issued for a certain location, your insurance carrier typically won't accept a new application, increase your coverage, or accept an existing application. The National Hurricane Center (NHC) analyzes dangerous weather conditions and also delivers alerts to affected regions. As a result, if you reside near a coaster area, you should check the NHC list frequently for any updated warnings. The National Oceanic and Atmospheric Administration (NOAA) also monitors wind patterns, thunderstorm clouds, and different precipitation kinds. They provide weather forecasts and alerts through their National Weather Service (NWS). The NOAA is capable of foreseeing and detecting a wide range of natural calamities, including hail, floods, tsunamis, thunderstorms, high winds, and many others. The NOAA's and the NHC’s resources and services allow people to make informed choices about their disaster insurance policy.

Areas susceptible to certain natural disasters in Georgia include:

FLOODING

• Atlanta

• Savannah

• Augusta-Richmond

• Columbus

• St Simons Island

HURRICANES OR TROPICAL CYCLONES

• St Marys

• Darien

• Brunswick

• Midway

• Tybee Island

WILDFIRES

• Stockbridge

• Decatur

• Woodstock

• Rome

• Acworth

SINKHOLES

• Atlanta

• Valdosta

What Should I Do after a Natural Disaster in Georgia?

The effects of natural disasters may be felt immediately after they occur and also in the future if you are uninsured. A disaster can happen to anyone at any time, so it is essential to be prepared for it. If you are an uninsured victim of a natural disaster, it means you have to pay for damage repairs or rebuilding costs out of pocket. One natural disaster occurrence can result in damages worth thousands of dollars and may leave an uninsured individual with a heavy debt burden. Thousands of people have become homeless and have had to take refuge in government-provided shelters because they were not properly insured.

Since it takes 30 days before a claim can be filed after purchasing an insurance policy, it is important to be duly insured before disaster strikes. You will need the services of a Georgia-licensed disaster insurance agent to determine whether you have sufficient coverage under your policy. This is because if you are underinsured, your insurance company will only cover the repair cost within the limits of your coverage, leaving you to cover the remaining costs out of pocket.

If you are properly insured and have been affected by a natural disaster that causes damage to your commercial or residential property in Georgia, these are the following steps to take:

• Ensure you and your loved ones are safe

• Take extensive photos and videos of damaged areas in your building, as well as unaffected areas

• Inform your insurance company through an agent and give them as much information as you can

• Expect an adjuster to come to verify your insurance claim on your building and determine a fair settlement amount after filing a claim

• Make emergency repairs to reduce further damage but make sure you keep all receipts from the repair to ensure full reimbursement

• Keep all old invoices and receipts; this will help the adjuster assess the value of your personal belongings

• Ensure you do not throw away any damaged property until the adjuster assesses the damage

• Contact FEMA if the natural disaster is flood-related or you have been affected by a storm, as FEMA can provide housing assistance, low-interest loans, grants, and other resources and services to get you through the tough times.

• If you have to vacate your property temporarily, ensure you remove all valuables from your building or properly secure them

• After your insurers accept your claim, ensure to hire a professional contractor to fix up your property.

Be proactive. Insure your property from natural disasters before they occur. Nobody likes buying insurance, but everyone loves being able to file the claims once the insured loss eventually occurs.