The official hurricane season begins in Mexico on May 15 on the Pacific coast and June 1 in the Caribbean and Gulf of Mexico. It is very important to be clear about how to protect my house and understand the hurricane coverage in the Casa Habitación Insurance Policy; this is within the endorsement called Hydrometeorological Phenomena, which was created in Mexico to identify the areas of greatest risk to damage produced by natural events due to the incursion of water into the home. This endorsement includes the following coverages:
Therefore, although the event has not been defined as a Hurricane (wind speed of more than 119 km /h), damage from storms and rains are also covered in this endorsement.
Within the policy, the constructions are covered, that is, the main building of the house and those that are separated such as fences, retaining walls, pagodas and other permanent fixed facilities that are outside. In addition, the contents, both furniture and personal items that were inside of the house, are covered.
All that furniture that is on the outside and that could have been protected is excluded. Hurricanes are known in advance, so it is the responsibility of the insured to minimize the damage before this natural phenomenon arrives. If it is shown that it was impossible to protect them, you can negotiate with the insurer that costs for damages suffered by this furniture should be recoverable under the insurance policy.
Deductible and Coinsurance
The Hydrometeorological Phenomena endorsement has by law a deductible and a coinsurance, which change depending on the area of the Mexican territory where the house is located.
Deductible: These are the first pesos or dollars paid by the insured. It is set in percentages on the value of the building plus the contents and goes from 2% to 5% normally.
Coinsurance: Once the deductible has been applied to the claim, the insured's co-insurance or co-participation in the loss is applied. It also varies depending on the area of the country in which the house is located. It is normally 10% or 20%.
Example of damages and payment by the insurance companies
If the house has an insured sum of 1,000,000 pesos and the damages from the hurricane are 400,000 pesos, the deductible and coinsurance are applied as follows:
|Deductible 2%||1,000,000 x 2% = 20,000|
|Subtotal||400,000 – 20,000= 380,000|
|Coinsurance 10%||380,000 x 10% = 38,000|
|380,000 – 38,000 = 342,000|
|The insurance company will pay the insured 342,000 pesos|
Contact us, we will gladly make a study of your property and design the best protection against these natural phenomena.