Posted on May 19, 2014

Why Rhode Island Businesses Need Coastal Insurance

Rhode island coastal insurance

As if business coastal insurance rates were not high enough, many Rhode Island companies now face cancellation of policies due to the frequency of losses from hurricanes, storm surges and other coastal related weather events. Many insurance companies have decided to pull out of markets up and down the Atlantic seaboard and Gulf coast due to the recurring disasters that continue to hit coastal states.

Despite the absolute need for coastal insurance coverage, there are fewer insurance options to residents and business owners on the Rhode Island coast so citizens must pay whatever the rate is to maintain the right amount of protection in the event of storm damage.

Besides a shrinking market of carriers, businesses must also face the high cost of hurricane deductibles if their hurricane coverage is triggered. These deductibles are separate from standard commercial property insurance policies and usually represent a percentage of the business property value. Hurricane and other storm deductibles vary between 1 and 15 percent of the property value and are typically mandatory for property located in high risk coastal areas. Many states are now defining what causes a hurricane deductible to trigger since many insurance companies were charging the deductible for tropical storms and the like. Now, most companies only utilize the hurricane deductible if winds exceed 74 miles per hour.

With the chances of storms, hurricanes and tropical storms in Rhode Island, businesses in high risk areas must obtain and maintain appropriate levels of coastal insurance to protect themselves from losses and damage. Also, adding business interruption insurance to protect business income helps to keep companies open and paying expenses when it must close for repairs due to a covered event.

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