Windstorm Hazard

AAA

DEFINITION of 'Windstorm Hazard'

The risk that a property will sustain losses due to strong winds. Windstorm insurance, or storm insurance policy or endorsement, generally covers losses resulting from excessive wind and/or hail. Most homeowner's insurance policies exclude coverage for losses arising from windstorms, and if coverage is desired, a separate windstorm insurance policy or endorsement must be purchased.

INVESTOPEDIA EXPLAINS 'Windstorm Hazard'

Following several legal cases involving years of appeals after Hurricanes Katrina and Rita, it became evident that consumers require better education regarding the need for separate flood and wind peril policies. Insurance companies considered adding the wind peril to flood insurance policies, adding the flood peril to standard homeowners' policies, making improvements to the National Flood Insurance Program (NFIP), and requiring more strict building codes in coastal and floodplain regions. Currently, new and renewal homeowner's policy notifications include information regarding the absence of flood coverage in standard policies, and the need to consider this type of coverage.

RELATED TERMS
  1. Water Damage Legal Liability Insurance

    A policy that provides financial protection to a person or business ...
  2. Flood Insurance

    A financial instrument that protects real property owners from ...
  3. Insurance Underwriter

    A financial professional that evaluates the risks of insuring ...
  4. Insurance

    A contract (policy) in which an individual or entity receives ...
  5. Casualty Insurance

    A broad category of coverage against loss of property, damage ...
  6. Hazard Insurance

    Insurance that protects a property owner against damage caused ...
RELATED FAQS
  1. How does life insurance help high net worth individuals protect their businesses ...

    Life insurance protects the businesses and personal wealth of high-net-worth individuals, or HNWI, by guaranteeing their ... Read Full Answer >>
  2. What is the usual profit margin for a company in the insurance sector?

    The best estimates of the average insurance company net profit margin are between 3 and 8%, with a likely median average ... Read Full Answer >>
  3. What financial ratios are most useful for an investor to evaluate the liquidity of ...

    An insurance company, like any other nonfinancial company, needs access to liquidity in case it needs to fulfill its debt ... Read Full Answer >>
  4. What are the benefits of high net worth insurance?

    High-net-worth individuals (HWNI) face unique insurance challenges and tend to gravitate towards different insurance products. ... Read Full Answer >>
  5. What debt/equity ratio is typical for companies in the insurance sector?

    The debt-to-equity ratio is calculated by dividing total liabilities by total equity, and it is used to measure leverage. ... Read Full Answer >>
  6. How does the risk of investing in the insurance sector compare to the broader market?

    Due to economic, demographic and interest rate trends, there is less risk when investing in the insurance sector compared ... Read Full Answer >>
Related Articles
  1. Home & Auto

    The Beginner's Guide To Homeowners' Insurance

    Discover everything new homeowners need to know before they sign on the dotted line.
  2. Home & Auto

    Prepare Your Finances To Handle Natural Disasters

    Use these easy tips to protect your financial interests from natural disasters.
  3. Insurance

    Will Filing An Insurance Claim Raise Your Rates?

    An accident can mean higher insurance costs - even if it wasn't your fault.
  4. Professionals

    An Advisor's Guide to Prof. Liability Insurance

    A guide to what financial advisors need to know about professional liability insurance.
  5. Insurance

    India's Two-Child Policy

    As of 2014, 11 Indian states have passed laws to restrict Indian citizens from having no more than two children.
  6. Economics

    What Does Asymmetric Information Mean?

    Asymmetric information describes a situation where one party in a transaction knows more than the other.
  7. Fundamental Analysis

    How to Calculate a Combined Ratio

    Combined ratio is a formula used in the insurance industry to measure the performance of an insurance company.
  8. Insurance

    Explaining Insurance

    Insurance is a form of contract between an individual and an insurance company that spreads risk in exchange for premium payments.
  9. Economics

    How Big Data Has Changed Insurance

    No longer confined to technology, big data has become integral to providing solutions to the insurance industry's long standing challenges.
  10. Professionals

    How to Fund Retirement with Insurance

    So you've contributed the max to all available retirement vehicles...now what? Consider a permanent life insurance policy (and its fee structure).

You May Also Like

Hot Definitions
  1. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  2. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  3. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  4. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  5. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  6. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
Trading Center