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Hurricane Matthew: Watch out for these insurance surprises

As Hurricane Matthew makes landfall, know your homeowners’ insurance policy

Whether you're hunkering down or clearing out in advance of Hurricane Matthew, take stock of your homeowner's or renter's policy and the limits of your coverage.

The hurricane is expected to make landfall — or at least come close to the eastern Florida coast — Thursday, bringing with it Category 4 winds of 145 miles per hour, NBC News reported.

Property insurance is likely the last thing on the minds of Floridians who have been ordered to evacuate the area, but it will be the first thing they'll have to deal with once the storm has passed.

Here are some key things you should know about your policy, and some suggestions to help ease the claims process.

Brent Scurry of Lake City, South Carolina climbs a ladder to install window shutters at an ocean front home in anticipation of Hurricane Matthew in Garden City Beach, South Carolina, U.S. October 5, 2016.
Randall Hill | Reuters
Brent Scurry of Lake City, South Carolina climbs a ladder to install window shutters at an ocean front home in anticipation of Hurricane Matthew in Garden City Beach, South Carolina, U.S. October 5, 2016.

1. Know your coverage. Unfortunately, it's obviously too late to purchase insurance coverage if you don't have any.

If you do have a standard homeowner's policy, it most likely will not cover flood damage. Instead, you'll need to buy flood insurance from your agent or from the National Flood Insurance Program.

Be aware that even if you're properly insured, you may have to contend with high deductibles. For instance, a homeowner's policy that protects against hurricanes could require you to foot the bill for damages equivalent to 5 percent of the value of the home.

You can use an emergency fund to absorb the cost of the deductible, but if you don't have the cash, you can turn to a home equity line.

"Once you have damage to a house that needs repair, the bank will not give you a home equity line." -Carolyn McClanahan, director of financial planning at Life Planning Partners

Secure that line ahead of time, says Carolyn McClanahan, director of financial planning at Life Planning Partners. "Once you have damage to a house that needs repair, the bank will not give you a home equity line," she said.

2. Know your deductibles. Further, know which situations will trigger your policy's high deductible for hurricanes.

"Sometimes these higher deductibles can only be triggered by a named storm with winds that reach a certain mile per hour," said Peter Kochenburger, executive director of the University of Connecticut's Center for Insurance Law.

State insurance laws and policy conditions will specify when exactly the hurricane deductible kicks in. Back in 2012, when Superstorm Sandy hit New York, New Jersey and Connecticut, state governors ruled that hurricane deductibles would not apply because the storm didn't have winds that exceeded 74 miles per hour.

That decision saved homeowners from having to pay thousands of dollars in damages before meeting their deductibles.

3. Take inventory. One thing you can do before you evacuate is to make a video or take photos in which you note the valuables in your home. If you have receipts from when you purchased these items, document them, too.

Be sure to store your photographic proof on a thumb drive or on a cloud that's remotely accessible, said McClanahan at Life Planning Partners.

Know whether you have replacement cost coverage or cash value coverage on your possessions. The former — replacement cost — will replace the item regardless of when you had originally bought it. Cash value coverage, however, will consider depreciation of value when replacing the item you've lost.

Certain items, such as jewelry or art, require an additional rider, as they may be excluded from your homeowner's policy otherwise.

The National Association of Insurance Commissioners has an app and a downloadable inventory checklist to simplify the inventory process.

4. Filing a claim. Document all of your communications with an insurer, and don't be afraid to push back if you disagree with how they handle your claim, said Kochenburger of the University of Connecticut's Center for Insurance Law.

Hurricanes can lead to disagreements between homeowners and insurers, particularly when there's a combination of flood and wind damage in the aftermath. "You'll have disputes about whether this is flood damage or is it wind-driven rain," he said.

Contact your state insurance regulator if you and your insurer are at loggerheads about a claim.