Paying for Hurricane Insurance in Texas
You can pay for your hurricane insurance premium using various methods, such as credit cards, cash, checks, and money orders. If a lender is financing your house mortgage, you may be able to pay your storm insurance premium through an escrow account established for that purpose.
Who Pays for Hurricane Insurance?
The person or the business whose property is being insured, the policyholder, pays for the flood and windstorm insurance policies purchased to insure their property against hurricane damages.
What are the Payment Options for Hurricane Insurance?
The payment options for hurricane insurance coverages include:
Automatic payment - This method usually includes Automated Clearing House (ACH) and credit cards (credit card payments can be made using American Express, Discover Card, Master Card, Visa, or Diners Club credit cards).
Manual payment - This method involves the use of cash, check, or money order and may require the insured to visit the physical location of the insurer. Alternatively, the insured can send the required amount via mail if the insurance provider permits it.
Another method involves using an escrow account, which your mortgage lender can set up. This method is usually at the lender’s discretion.
Can I Finance the Hurricane Insurance Cost?
Yes. You can finance your hurricane insurance cost through premium financing in Texas. While residential property hurricane coverages can be usually paid monthly as a free option, commercial coverage is usually paid in full once a year. If the business wants to pay in smaller payments over time, it needs to use the services of a premium financing company, which pays the annual premium cost of your hurricane insurance for it. In return, the business pays back the company in monthly installments with interest based on the agreed payment plan (usually at the extra cost of 7%-12% per year).
Speak to your insurance agent to learn about the best premium financing options they have access to.
How Often is Hurricane Insurance Paid?
Hurricane insurance coverages are paid annually. Nonetheless, some insurance companies allow their residential customers to pay their premiums quarterly or monthly. Depending on the payment plan, this can be on the first day of the month or the policy purchase’s anniversary.
How Do I Send my Hurricane Insurance Bill?
You can send your hurricane insurance bill after receiving a renewal reminder from your private insurance company or National Hurricane Insurance Program (NFIP) or TWIA. Usually, you receive renewal reminders within the weeks leading up to your policy's expiration date. The mode of sending your bills to your insurance provider is usually contained in the policy document online or in person. If you have any questions about your insurance policy, contact a licensed insurance agent. The agent can help you clarify any issues or provide you with the necessary details.
Do I Pay Taxes on Hurricane Insurance?
No. You do not pay a sales tax on hurricane einsurance. The insurers will have to pay sales tax to the state of Texas, based on the coverage you have purchased from the, but the insured does ot need to pay tax.
Additionally, you do not have to pay taxes on the claims payout from your insurer for repairs or replacements after hurricane damage. This is because the payout you receive from your insurer is only meant to restore your home or commercial property to the state it was before the hurricane damage. For instance, suppose your house gets damaged by a hurricane and the total damage incurred is $30,000. In that case, you can only file a claim with your insurer for the $30,000 damage; you will not get any extra income from the claim. This means that there is no income to tax and the Internal Revenue Services only tax income. However, if you have money remaining after the repairs or replacement of your property are complete, you may be required to pay taxes on this income. This is when you must file an IRS Form 1099-MISC, Miscellaneous Income. You should contact a state-licensed insurance agent for better insight on whether you will be required to file taxes after a claim payout.
Is Hurricane Insurance Premium Tax Deductible?
The cost of hurricane insurance Texas is not tax-deductible for a homeowner. However, it can be considered a business expense if the insured property is leased out as a commercial property to another individual, which makes it tax-deductible. Make sure to discuss taxation issues with a certified financial professional.
Can you Pay Hurricane Insurance Late?
No, it is not ideal to pay your hurricane insurance late, as late payments can affect your premium and lead to a gap in your insurance policy. Flood insurance has a regular grace period of 30 days, while windstorm insurance has a grace period of 10 days after its annual due date. If you have not paid your windstorm or flood insurance on the due date, it's important that you contact your insurer to explain why and decide on a new payment plan. Otherwise, your policy will lapse, and you will lose protection against hurricane damages.
Does Hurricane Insurance Have a Grace Period?
Yes. The two coverages that make up hurricane insurance have grace periods. Flood insurance has a 120-day grace period after FEMA extended it from 30 days to 120 days due to the COVID-19 pandemic. Likewise, windstorm insurance has a grace period of 10 days. Although there is a grace period for flood and windstorm insurance, it does not extend after a policy's termination. If you do not renew your flood and windstorm insurance policy within the grace period for each policy, 120 days and ten days, respectively, your coverage will be terminated.
What to Do if you Can’t Pay for Hurricane Insurance?
If you can’t afford to buy hurricane insurance, you can get help from the Small business Administration. This agency can provide loans to help cover the cost of repairs and other disaster-related expenses. The loans can serve as home insurance repair or replacement and it can cover other personal expenses. However, they won't be able to help you upgrade it from its initial state. The SBA has a limit of $200,000 that it loans to individuals to help them repair or replace damaged or destroyed property. It also has a limit of $40,000 for the replacement of personal property. You will be required to pay back the loan you receive from the SBA. Its low-interest rate and long repayment periods make it an attractive option for people who need financial assistance. Like FEMA grants, the loans offered by the Small Business Administration only cover the repairs and replacement of your home. This means that you can only use the loans to protect the primary residence.
If you can’t afford to buy Texas flood insurance to protect against flood-related hurricane disasters, then you might be able to get help from FEMA. The agency can help individuals and households get back on their feet after a hurricane disaster through the Individuals and Households Program (IHP). The IHP can provide grants to individuals whose houses are located in areas that have been declared disaster areas. These grants are available immediately after a disaster has occurred. Although the IHP's maximum grant of $33,000 is available, it's important to note that the purpose of the grants is to ensure that you are not displaced from your home after a hurricane disaster. Aside from being located in a disaster area, other requirements to get the grant include:
The home has to be where you have lived for most of the year
No flood insurance policy covers the home
You must be a US citizen or a qualified resident
The home is currently uninhabitable due to the disaster
If you live in a hurricane zone and do not have hurricane insurance, FEMA will only allow you to make one claim. This means that if you want to remain protected from future hurricane disasters, you will need to purchase flood insurance.
If you cannot afford to pay for this disaster insurance, consult with a knowledgeable insurance professional to find other available options.
Will my Hurricane Insurance Lapse if I Miss a Payment?
If you cannot make a payment on time, your hurricane insurance will not lapse immediately. This is because flood insurance coverage has a 120-day grace period, while windstorm insurance coverage has a 10-day grace period. However, if the grace periods of your flood and windstorm insurance have already expired, your insurance coverage will lapse. If you have a lapse in your insurance payment, it can raise your premium costs in the future. If you find it difficult to make payments during the grace period, you should speak to your Texas insurance agent to advise you on your available options and how you can avoid a lapse in your policies.
