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Before Gustav even made landfall, we lost electricity.  Four hours into it, and all the usual wind/rain with nothing out of the ordinary.  The dogs went outside with no problem.  We were just waiting for it to finish passing then move on with our lives.  But then, all of a sudden the gusts started escalate.  The winds didn’t look so usual- more like a tornado – whipping trees all around, picking up huge limbs already on the ground and tossing them around like feeble matchsticks.  The storm went from “What a bore, when do you think the electricity will come back” to “Good Lord!  Please don’t demolish my home!”  We started to see shingles fly, one sheet … then two.. then an entire pile of twenty or so.

In the end, my home did make it out intact.  We had roof damage, two trees uprooted, and lost part of our fence.  When you look down my street and around the neighborhood, our loss was quite minimal.  Many houses have trees that tore gaping holes in the roof and we saw many homes with roofs that caved in entirely.

During the storm, as I saw each shingle fly off, I thought about that blasted hurricane deductible and I thought about how having to buy a new roof I wasn’t intending on replacing.  Of course we are fortunate that we can afford it, but it annoyed me that I might have to put other goals on the back burner for a while. 

Today, 6 days after the storm, my home is still without electricity.  We had to move temporarily to my in-laws, who have electricity.  It is estimated that it will take 3 weeks from now (4 weeks total) before my neighborhood has power.  Our area in town resembles a third-world country.  Long lines outside grocery stores, rationing of grocercies and gas, lines a mile long to get gas.  My husband has been working 12 hour shifts since the week before the storm, and got his very first day off in two weeks yesterday.  Today, Sunday, he is back at work.  Now all I can think about is having him here with me.  The deductible and the roof seem like distant memories that are of no concern any more. 

My husband will be taking home a nice overtime paycheck next week.  Usually, this would make me giddy with delight, but today I’d pay any price just to have him with me and forget about the stupid overtime.  My husband was the one that taught me how important family is and to never put money before family.  Today, I am reminded of this important fact.

With hurricane Gustav on it’s merry way toward the still-recovering gulf coast, I got to thinking about my homeowner’s insurance policy. After people were royally screwed by their insurance companies after Katrina, I am very suspicious about the effectiveness of my insurance. It makes me wonder if homeowner’s insurance is really worth the steep premium?

Let’s start with reasons it might NOT be worth it:

1. My premium doubled after Katrina.
2. My area’s premiums were the highest in the nation to start with.
3. I got a laundry list of new exclusions in the mail shortly after Katrina.
4. Katrina ushered in this new form of a deductible called a “Hurricane Deductible.”
   If my home is damaged by a hurricane, my deductible is now a whopping 5% of my home’s value versus the normal 1% for every other claim. On a $300,000 home that is a hurricane deductible of $15,000…the average Katrina claim was $15,399.
5. If you do file a claim, they could cancel your insurance, or you could be uninsurable.
   My condo was broken into a few years ago. Naturally, I called my insurance company- that’s what I pay for, right? Well, after that I was uninsurable…after ONE claim. The only way we got insurance on our new home was by putting the insurance on my husband’s name instead of mine.
6. We have to pay extra surcharges (5%) in our state to pay for all the uninsured people.
7. Flood insurance is prohibitively expensive in my area, so if my roof is blown off and it rains in my house, too bad for me.
8. Did you see how the insurance companies responded to claims from Katrina? Enough said.

Reasons Homeowner’s Insurance is important:

1. If my home was flattened to the ground, could I afford to finish off the mortgage AND buy a new home? Defiantly not

This reason alone makes the steep premium worth it, even though it still leaves me bitter and angry…

To be honest, the state of homeowner’s insurance in the gulf-south is so horrendous I am amazed we allow this to happen. We should have took to the streets and rallied against the insurance companies after Katrina. We should have held politicians to the fire and forced them to take a stand toward these insurance companies. Instead, we were depressed and defeated. This time around, the insurance problem may be, I hate to say it, WORSE. It has been reported that insurance may not cover as much as for Gustav as it did after Katrina. And the poor wittle insurance companies are whining because Gustav might cut into their profits. boo-hoo.

This weekend I met a woman whose house was accidently demolished in New Orleans post-Katrina. Her home was not destroyed by the storm/flood and with new sheet rocking on the bottom floor, it was salvageable. Then one weekend she drove up, and all her neighbor’s homes were still in the same spot, but her home was completely missing. It sounded like something from a dream/nightmare. You drive up and your house is just GONE. The sad part? Insurance doesn’t cover this and you are forbidden by the law from suing for this. She wasn’t the only one. Several people experienced this horror. What would be your financial outlook if suddenly the home you had paid off for your whole life vanished? For many people their home is their most valuable asset. This is certainly a good lesson to diversify, although that may be the only positive from this deeply saddening story.