Key takeaways

• Wire transfers, third-party apps, ACH transfers and checks can all move money between banks.
• Wire transfers are fastest but most expensive, while ACH transfers are free but slower.
• Third-party apps like Zelle often balance speed and cost for everyday transfers.
• Your choice depends on how quickly you need the money and what fees you’re willing to pay.

Moving money between banks is something most people need to do at some point. Maybe you’re paying rent to a landlord who banks elsewhere, sending money to family or transferring funds between your own accounts at different institutions.

The good news? You have several options, each with different speeds, costs and convenience levels. Wire transfers can move money in hours but cost around $25. ACH transfers take longer but are typically free. Third-party apps like Zelle sit somewhere in the middle.

What are bank-to-bank transfers?

A bank-to-bank transfer moves funds from an account at one financial institution to another. Banks call these “external transfers” since the money leaves their system entirely.

You can typically set up these transfers through your bank’s website, mobile app by phone or at a branch. The process involves providing the recipient’s banking details and specifying how much to send.

What you need to know about your recipient before sending money

You’ll likely be required to input the recipient’s bank routing number and account number, at the very least. For some services, like Zelle, you will only need the person’s phone number or email address. Before clicking send on a transfer, double and triple-check the recipient’s information (even if that recipient is you).

What you need before transferring money

Before sending money, gather the recipient’s information. For most methods, you’ll need their bank routing number and account number. You can find routing numbers on checks or by searching online for “[Bank Name] routing number.”

For services like Zelle, you only need the person’s phone number or email address that’s linked to their bank account.

Double-check all information before hitting send. Bank transfers are hard to reverse once they’re complete.

Factors to consider when choosing a transfer method

Your priorities will determine which transfer method works best for your situation.

• Speed matters most when you’re making time-sensitive payments like rent due today or emergency funds for family. Wire transfers and some third-party apps can move money within hours or minutes.
• Cost matters most when you’re making routine transfers or sending large amounts where percentage-based fees add up. ACH transfers are typically free, making them ideal for non-urgent moves.
• Convenience matters most when you’re transferring money regularly. Having the recipient’s phone number is easier than looking up their routing and account numbers every time.
• Security matters most when you’re sending large amounts or dealing with unfamiliar recipients. Traditional bank channels offer more fraud protection than newer apps.

4 ways to transfer money between banks

1. Wire transfers

A wire transfer is one of the fastest ways to transfer money electronically from one person to another through a bank or a nonbank provider such as Wise (formerly TransferWise).

To send a wire, you’ll need the recipient’s full name, address, bank routing number and account number. Most banks let you set up wires online, by phone or at a branch.

The downside? Cost. Banks charge an average of $25 for outgoing domestic wires, according to Bankrate’s latest fee survey. International wires cost even more, often $40-50 plus currency conversion fees. Wire transfers also can’t be sent on weekends or bank holidays, and they’re nearly impossible to reverse once sent.

2. ACH transfers

Then there are Automated Clearing House (ACH) transfers. These move money through a network that processes billions of transactions annually.

ACH transfers typically take 1-3 business days and are usually free. You can set them up through your bank’s website or app using the recipient’s routing and account numbers.

Many banks now offer same-day ACH for a small fee (usually $5-10), which can get money there within hours rather than days.

The Federal Reserve processes ACH transfers in batches rather than individually, which is why they take longer than wires but cost much less.

3. Third-party companies and mobile apps

Banks aren’t the only option for sending money. PayPal, MoneyGram, Zelle, Venmo, and other third-party companies are also considerations. Transfers can take seconds or a few days, depending on the method selected.

Zelle is built into most major banks’ apps and websites. It can send money in minutes using just a phone number or email address (here’s how). Most transfers are free, and there’s no separate app to download if your bank supports it. Check out our beginner’s guide to using Zelle to learn more.

PayPal works with or without a bank connection. Free bank transfers take 1-3 business days, while instant transfers cost 1.75% of the amount sent.

Venmo (owned by PayPal) is popular for splitting bills and casual payments. It includes social features but has lower transfer limits than some alternatives.

Cash App offers instant transfers for a 1.5% fee or free transfers that take 1-3 business days.

Each service has different limits, fees and features. Zelle typically has the highest daily limits ($2,500-5,000 depending on your bank), while others may limit you to $3,000 per week or less.

4. Write a check

Checks might seem old-fashioned, but they’re still useful for certain situations. You can write a check and mail it, deposit it through mobile banking or deliver it in person. Here’s a guide on how to write a check.

Cashier’s checks offer more security for large amounts since they’re guaranteed by the bank. Money orders work similarly but are available at grocery stores and other locations beyond banks.

Check clearing times vary but typically take 1-2 business days for local banks and up to five days for out-of-state institutions. Banks may place holds on large checks or deposits from new accounts.

What are the benefits of external bank transfers?

External bank transfers allow you to transfer funds between banks or send funds to another person without having to visit a branch or ATM.

• Account optimization: You can keep high-yield savings at online banks while maintaining checking accounts at local branches for easy access.
• Bill paying flexibility: Send money to landlords, contractors or family members regardless of which bank they use.
• Emergency access: Quickly move money when you need funds in a specific account.
• Business needs: Separate personal and business banking while still moving money between accounts as needed.

Compare savings account rates and find the best options for your money with Bankrate’s best high-yield savings accounts.

Transferring money between your own accounts

If you have accounts at multiple banks, you have several options for moving your own money around.

Most banks let you link external accounts for ACH transfers. This process typically involves providing the other bank’s routing and account numbers, then verifying small test deposits. Zelle can work for self-transfers if both banks support it and you use the same phone number or email for both accounts.

Lower-tech options include writing yourself a check or withdrawing cash from one bank to deposit at another, though these methods have obvious limitations for large amounts.

The best transfer method depends on your specific needs, but having the right bank accounts makes any transfer easier. check out Bankrate’s best checking accounts to find the right option for you.

Bottom line

Moving money between banks is easier than ever, whether you need same-day delivery or can wait a few days to save on fees. Wire transfers offer speed for urgent needs, ACH transfers provide free options for routine moves and third-party apps balance convenience with reasonable costs.

With the right approach, you can move money efficiently while minimizing costs and maximizing convenience.

The best strategy is to avoid fees altogether

What Is a Traditional Economy?

When you’re already experiencing financial hardship, getting hit with overdraft fees can be devastating, both emotionally and financially. Even when you aren’t facing hard times, an overdraft fee is a nuisance.

Banks may limit the number of overdraft fees they charge in a single day, but even then, the fee can get quite expensive, particularly for people who overdraft regularly. Frequent overdrafters average around 11 overdraft or insufficient funds fees (NSF), according to a 2020 study from research firm Oliver Wyman, and overdraft and NSF fees generate $17 billion annually for banks.¹

You have options for waiving overdraft fees, though, especially if you don’t routinely overspend your checking account. With a better understanding of when banks charge them, you may be able to avoid future overdraft fees. On the rare occasion that you overspend, knowing how to speak to your bank can reduce or even eliminate overdraft fees.

What Are Overdraft Fees?

Your bank charges an overdraft fee when it pays for a transaction even though you don’t have enough money in your account to cover the transaction. Overdrafts can happen if you write a check or swipe your debit card for more than the amount you have available in your checking account. Having multiple transactions hit your account on the same day can also put you at risk of incurring multiple overdraft fees.

Note

The median overdraft fee of the top 50 banks by market share is $34, according to the Consumer Financial Protection Bureau.²

In some cases, the bank may return the transaction to the merchant and charge you a non-sufficient funds or insufficient funds fee instead of covering the purchase for you and charging an overdraft fee.

How Do Overdraft Fees Work?

Overdraft fees can be quite expensive, costing close to $40 each occurrence, depending on your bank. The fee doesn’t have to come as a surprise. Some banks let you enroll in alerts that will notify you by text, email, or mobile notification if your account is overdrawn. You may also spot the fee when you’re checking your transaction history online or reading through your billing statement. Your online account may note the transaction that triggered the overdraft fee.

Overdraft fees are charged per transaction, which means your bank could hit you with multiple fees on the same day if you have several transactions posted to your account after you’re overdrawn. Depending on the bank, you could end up with nearly $200 in overdraft fees in a single day.³

Note

Your bank may limit the number of overdraft fees you’re charged in a single day, which keeps you from being charged an excessive amount of overdraft fees.

Overdraft Fees by Bank

The majority of banks big and small charge overdraft fees, though the amount and maximum number of fees they charge per day varies.

Bank	Overdraft Fee	Max Fees Per Day
Ally Bank	$0	N/A
Bank of America	$35 on transactions over $1	4
Capital One	$0	N/A
Chase	$34	3
Citi	$34	4
Citizens Bank	$37, and an additional $30 fee on the fifth, eighth, and 11th day an account remains overdrawn	5
Truist	$36	6

How To Get Overdraft Fees Refunded

If you’ve been charged an overdraft fee, you may be able to get it refunded with just a few steps as long as you’re not a repeat offender.

Call Your Bank

Once you notice an overdraft fee has been charged, give your bank a call. You can find the number quickly on the back of your debit card or the bank’s website, or in your mobile app.

Make Your Request

Let the bank know that you’d like to have the overdraft fee waived. You can say something like, “I noticed I was charged an overdraft fee on [date] and I’d like to have it removed.”

It may help to give the bank some background on what led to the overdraft. For instance, your pay was delayed, a bill was processed sooner than you expected, or you’ve been experiencing financial hardship.

Use Your Bank History

If you’ve otherwise been a good bank customer and have avoided overdraft fees so far, bring this up. For instance, you can say, “I’ve been a good customer for several years and overdrafting is not common for me. Is there something you can do?”

Be Polite

Remember, you’re asking the bank to do you a courtesy. Asking nicely goes a long way. Avoid getting angry, even if the customer service rep isn’t budging on waiving the fee.

Tips for Avoiding Overdraft Fees

Banks may be less willing to waive your overdraft fee if you’ve made overspending a habit. There are some ways you can avoid overdraft transactions, saving yourself hundreds of dollars in fees and eliminating the stress of asking for fees to be waived.

• Deposit or transfer funds before the cutoff time: Depositing enough money to cover the pending transactions can prevent you from overdrafting your account.
• Look for a bank that doesn’t charge overdraft fees: They may still process overdraft transactions but won’t charge you a fee for it.
• Sign up for bank balance alerts: These alerts notify you if your account balance drops below a certain amount, which can let you know you need to make a deposit before that day’s deposit cutoff time.
• Sign up for overdraft protection. This feature transfers money from a linked bank account or credit card to prevent overdraft. Some banks still charge a fee for overdraft protection transfers, but this is typically lower than an overdraft fee.

Note

Overdraft transfers from a credit card may be treated as a cash advance, which typically involves paying a cash advance fee and a higher interest rate than you would for purchases. Cash advance transactions don’t have a grace period for avoiding finance charges—interest starts on the transaction date.

Malpractice insurance is a critical policy that all those working in the medical industry should have.

Proving malpractice

Professionals are expected to perform their services properly and with sufficient expertise. Clients and patients assume someone with a professional designation has the knowledge and resources to do the job right. Sometimes, however, a professional, such as a doctor or lawyer, makes an egregious mistake that causes significant harm to a patient or client. That is called malpractice.

When a professional commits malpractice, the patient or client may sue to recover financial compensation to ameliorate some of the harm that has been done. It’s then up to a court to decide if a mistake was made, if it rises to the level of malpractice and, if so, what the penalty should be. Malpractice awards are often hundreds of thousands of dollars, and they can even climb into the millions. Because the stakes are high, malpractice insurance is a necessity.

What is malpractice insurance?

Malpractice insurance is a liability insurance policy for healthcare or legal professionals. When errors happen while executing professional services and the professional is deemed at fault, malpractice insurance pays the penalty so the professional doesn’t have to pay for claims out of their pocket.

Who needs malpractice insurance?

Malpractice insurance is for legal and healthcare professionals.

Malpractice insurance for legal professionals

In the legal profession, malpractice insurance covers mistakes an attorney might have made in handling a client’s case. Typically, only attorneys are covered by malpractice insurance. Law firms, however, may have an umbrella insurance policy that covers all its employees, including paralegals and administrative staff. 

Solo lawyers, however, need their own malpractice insurance policies. “When it comes to legal malpractice insurance, many people don’t realize just how vulnerable attorneys can be to claims of negligence, errors or ethical breaches,” said Stephen Wagner, managing partner and co-founder at Wagner Reese LLP. “For instance, a malpractice lawsuit could spawn if a lawyer misses a critical filing deadline, such as a statute of limitations, causing a client to lose out on their right to pursue financial compensation for their case. Other malpractice issues arise when an attorney provides incorrect legal advice that results in a client suffering financial harm, if the attorney fails to respond to court deadlines which harms a client’s case or if the attorney fails to keep the client advised of the status of a matter.”

Malpractice insurance for healthcare professionals

In healthcare, doctors, surgeons, nurses, physical therapists and specialists can obtain malpractice insurance. Medical malpractice insurance pays claims when patients assert that a healthcare professional hurt them in some way due to negligence or harmful treatment. An example of medical malpractice is if a surgeon operated on a patient while drunk and caused severe harm. 

“If a medical practice is hit with a malpractice claim and they have insurance, the first step is to notify their insurer,” Wagner said. “The insurance company will typically assign an attorney to handle the defense, cover legal fees and, if necessary, negotiate a settlement. If the case goes to trial, the insurer will provide legal representation and pay damages up to the policy limits.”

When a medical practice doesn’t have malpractice coverage, the financial implications can be catastrophic. “Without malpractice insurance, however, the situation becomes far more dire,” Wagner said. “The practice has to pay for its own defense, which can quickly add up to hundreds of thousands of dollars. If they lose the case, they must also pay any settlements or judgments out of pocket. For smaller practices, that financial burden can be enough to force them out of business.” 

Malpractice policies are specific to the industry they cover and have crucial exclusions and terms. It’s critical to read policy documents carefully before buying a policy.

FYI

Other professionals, such as accountants, general contractors and financial advisers, would obtain professional liability insurance instead of malpractice insurance.

Types of malpractice policies

There are two types of malpractice policies. Both cover the same things when your business gets sued; the difference is how that coverage is applied in relation to when the claim is made.

Claims-made malpractice insurance

Claims-made coverage requires the policy to be active when the claim is made. A healthcare provider or attorney who had a lapse in coverage could still add a retroactive date of coverage. 

“A claims-made malpractice policy covers claims only if both the alleged incident and the claim occur while the policy is active,” said Loren Schwartz, a partner at Rouda Feder Tietjen and McGuinn. “If coverage lapses, past incidents won’t be covered unless the attorney purchases ‘tail coverage.’”

Suppose a doctor accidentally had a policy lapse and didn’t have coverage from Oct. 1 through Dec. 31. In that case, they could get a policy starting Jan. 1 with a retroactive coverage date beginning Oct. 1. That would provide the needed coverage for the period when they were uninsured. Retroactive dates require an added premium, but ensuring coverage is in place is often worth it.

A claims-made policy may also have an extended reporting period, such as six months after the policy’s lapse date. The extended reporting period would cover claims made during the policy’s effective period but reported after the policy lapses.

Tip

Legal malpractice insurance is always claims-made instead of per-occurrence.

Per-occurrence malpractice insurance

A per-occurrence policy is more expensive because it allows claims to be made anytime, whether or not the policy is active at the time of the claim, as long as the date that the claim-related activity occurred was during the coverage period. 

If a policy has coverage from Jan. 1, 2025, to Dec. 31, 2025, for example, a claim could be made on April 1, 2027, as long as the incident regarding the claim happened in 2025 during the coverage period.

Patients or clients sometimes do not make claims immediately after an incident because they are unaware of the problem. They may only be informed of an error in practice in a follow-up with another provider, thus creating a malpractice claim. As a result, Schwartz said, it can be worth the extra expense upfront for more extensive coverage. “In legal and medical fields, claims-made policies are more common, but per-occurrence coverage offers long-term security, making it more desirable for professionals wanting broader protection,” he said.

What does malpractice insurance typically cover?

Malpractice insurance covers the mistakes a medical or legal professional may make during regular business operations. Medical claims may have to do with misdiagnosis, surgical errors, medication errors, childbirth-related injuries and other mistakes made by medical professionals. Some Health Insurance Portability and Accountability Act (HIPAA) violations are also covered. 

For lawyers, malpractice insurance usually covers mistakes made while representing a client in a case. Policies may have different definitions of “legal services,” so it is important to read the policy documents carefully to understand your coverage. One policy may include only legal services a client paid for, for example, while another policy may also cover pro bono services.

What malpractice insurance covers	What malpractice insurance doesn’t cover
Defense, expert witness, legal, arbitration and settlement costs	Intentional wrongdoing
Punitive and medical damages	Illegal acts

Malpractice insurance won’t cover claims arising from sexual misconduct or physical abuse. If the claims are determined to be unfounded, however, the insurance will pay for the defense of the claim.

How much does malpractice insurance cost?

Since medical or legal mistakes often lead to settlements in the hundreds of thousands ― if not millions ― of dollars, malpractice insurance tends to be expensive. Malpractice costs vary widely depending on the profession and the type of practice involved. Schwartz said specialties such as neurosurgery, obstetrics and gynecology, orthopedic, and cardiothoracic surgery tend to come with the highest premium price tag. 

“Medical disciplines with the highest malpractice insurance premiums tend to be those with high-risk, high-stakes procedures,” he said. “These fields have higher claim rates and larger settlement amounts due to the potential for life-altering outcomes. On the other hand, lower-risk specialties, such as psychiatry, pathology and family medicine, typically see lower premiums since they involve fewer invasive procedures and lower malpractice claim frequencies.”

Medical malpractice insurance costs

Across medical specialties, annual malpractice insurance premiums average between $4,000 and $12,000, but that varies widely from state to state and across specialties. The range of costs reflects the risk each profession represents. Nurses, for example, are less likely to be sued than the doctor who oversees the nurse. Thus, there is less risk. Nurses could still be named in a lawsuit, however, and they aren’t covered by a doctor’s malpractice policy.

Here are a few examples of medical malpractice premiums:

• General practitioners: General practitioners’ policies average around $7,500 per policy year, but they can be more than $50,000 in some locations. 
• Surgeons: Surgeons often pay much more, averaging between $30,000 and $50,000 per year, but some policies exceed $100,000. 
• OB-GYNs: Premiums for obstetricians/gynecologists ― one of the specialties with the most frequent malpractice suits filed ― can be $200,000 or more per year.
• Nurses: Nurses pay less than other medical professionals, with policies that can be lower than $100 per year. 

Legal malpractice insurance costs

Costs for attorneys vary depending on the type of law they practice and whether they’ve had previous claims. On average, legal malpractice insurance costs between $1,200 and $3,500 per year. Attorneys in riskier practice areas pay between $3,000 and $10,000 per year. Risky practice areas include securities, intellectual property, personal injury, and trusts and estates. 

Paralegals may also carry malpractice insurance, although they are less likely to be sued than attorneys.

How much malpractice coverage is enough?

Basic malpractice insurance may not be enough. Remember that claims could result in settlements of millions of dollars. How does a professional determine the right amount of insurance to get? 

First, understand that policies come in various coverage amounts.

• Medical coverage: Smaller medical malpractice insurance policies start with $100,000 to $300,000 in coverage. That may be enough for a nurse or physical therapist, but most doctors need more. A doctor should have a minimum of $1 million in coverage, but even that could be inadequate.
• Legal coverage: The minimum coverage for legal malpractice insurance is around $100,000, but that may not be sufficient. A small law firm may get a malpractice insurance policy with $1 million in coverage. Depending on the number of attorneys in the firm and the area of practice, however, that may not be enough to pay for all claims. The typical maximum limit is $10 million.

To ensure adequate coverage, research the prevailing limits in your area for your profession or specialty. You should have those limits at a minimum. Some professionals will buy even more coverage, but remember that if you have more coverage than anyone else, you become a deep-pocketed target in a lawsuit that names multiple defendants. Some states also cap awards, so you may not need to extend coverage beyond the award limits. 

Still, it can be extremely beneficial to invest in supplemental malpractice coverage, depending on the nature of your practice’s work. Schwartz noted that add-ons, such as cyber liability protection, defense cost and reputation management coverage can serve as vital safeguards for your practice. “These enhanced policies provide a layer of financial and professional security that can mean the difference between a temporary setback and permanent damage to a practice,” Schwartz said. 

Both legal and medical professionals can benefit from investing beyond the most basic malpractice policy, Wagner advised. “Having higher coverage limits in an umbrella policy can be vital in cases where settlements or jury awards exceed minimum policy limits,” he said. “Many policies also include defense cost coverage, which helps pay for legal representation.”

Bottom Line

Talk to others in your profession who have dealt with claims to understand how much coverage you realistically need and the business insurance costs you’ll face.

Where can I purchase malpractice insurance?

You can purchase individual or group policies from a private insurance carrier. For medical professionals, medical risk retention groups can also provide coverage at a discounted rate to those in the group. 

Some employers have a policy that covers an entire entity, such as a hospital or law firm. That type of policy may cover some individual risk, but check with human resources to ensure that you have the coverage you need. Most doctors and specialists will have their own policies to protect their interests as a separate entity from the hospital or medical group they work with. Some lawyers may also have an individual policy covering legal work outside the firm.

When shopping for insurance, compare prices among various providers to ensure that you get the best coverage for the best price. Remember to compare policies apples to apples for each quote you get, and ensure that each one has the same coverage limits. See if a deductible applies and, if so, how much it is.

Proving malpractice

A patient or client can file an insurance claim anytime. Sometimes claims are made out of frustration and vindictiveness. Some are outright fraudulent. To get a settlement or a judgment from the professional or their insurance carrier, the plaintiff must prove malpractice occurred.

• Proving medical malpractice: To prove medical malpractice, the medical plaintiff must demonstrate that the doctor or other medical provider violated the general standard of care of the patient. The standard of care is an industry-approved level of care and protocol. The plaintiff and their attorney must prove a breach of protocol, prove that the error caused physical or emotional injury and provide evidence that the medical professional caused it.
• Proving legal malpractice: For legal malpractice, a plaintiff must prove there was an attorney-client relationship and that the lawyer committed one or more negligent acts that caused damage to the client. Usually, that means proving that if the lawyer had not made the specific mistake, the client would have won the case but instead lost due to the mistake.

What Is Bond Insurance?

Bond insurance is a type of insurance policy that a bond issuer purchases that guarantees the repayment of the principal and all associated interest payments to the bondholders in the event of default. Bond issuers will buy this type of insurance to enhance their credit rating in order to reduce the amount of interest that it needs to pay and make the bonds more attractive to potential investors.

Bond insurance is sometimes also known as financial guaranty insurance.

Key Takeaways

• Bond insurance protects bondholders from default by the issuer by guaranteeing repayment of principal and sometimes interest.
• Issuers of bonds that purchase this type of insurance can receive a higher credit rating on those bonds as a result, making them more attractive to some investors.
• Bond insurance is most commonly seen among municipal bonds and asset-backed securities.

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Understanding Bond Insurance

The rating of a debt instrument takes into account the creditworthiness of the issuer. The riskier an issuer is deemed to be, the lower its credit rating and, thus, the higher the yield that investors expect from investing in the debt security. Such issuers are faced with a higher cost of borrowing than companies that are estimated to be stable and less risky. In order to obtain a more favorable rating and to attract more investors to a bond issue, companies may undergo a credit enhancement.

Credit enhancement is a method taken by a borrower to improve its debt or creditworthiness so as to obtain better terms for its debt. One method that may be taken to enhance credit is bond insurance, which generally results in the rating of the insured security being the higher of the claims-paying rating of the insurer and the rating the bond would have without insurance, also known as the underlying rating.

Bond insurance is a type of insurance purchased by a bond issuer to guarantee the repayment of the principal and all associated scheduled interest payments to the bondholders in the event of default. The insurance company takes the risk of the issuer into account in order to determine the premium that would be paid to the insurer as compensation.

Tip

In 2020, the largest bond insurers included Assured Guaranty, followed by Build America Mutual, MBIA, Ambac, and Syncora Guarantee.¹

Other Considerations

Bond insurers generally insure only securities that have underlying ratings in the investment-grade category, with un-enhanced credit ratings ranging from BBB to AAA. Once bond insurance has been purchased, the issuer’s bond rating will no longer be applicable and instead, the bond insurer’s credit rating will be applied to the bond instead by notching it higher.

By design, bondholders should not encounter too much disruption if the issuer of a bond in their portfolio goes into default. The insurer should automatically take up the liability and make any principal and interest payments owed on the issue going forward.

Bond insurance typically is acquired in conjunction with a new issue of municipal securities. In addition, bond insurance can be applied to infrastructure bonds, such as those issued to finance public-private partnerships, non-U.S. regulated utilities, and asset-backed securities (ABS).

Owning a boat is an exciting, rewarding experience. However, just like any investment, it comes with responsibility. It’s up to you to be protected while you’re out on the water.

Fortunately, boat insurance can help you do just that. Although boat insurance is not mandated in many circumstances, forgoing it is risky. Below, we’ll explore the major risks of not having boat insurance and how to avoid them.

What are the Financial Risks of Being Uninsured?

You may be financially liable for damage caused to other people and their property in the event of an accident. The financial risks of an uninsured boat include: 

• Liability for Accidents & Injuries: If you cause a boating accident and don’t have boat insurance, you’ll be personally liable for injuries and property damage to other parties and their boat. Medical bills, repairs, and potential legal fees can quickly add up and take a toll on your finances.
• High Out-of-Pocket Repair Costs: Without a boat insurance policy, you’ll have to cover all repairs on your own.
• Theft or Total Loss: If your uninsured boat unexpectedly gets stolen or destroyed, you’ll have to replace or repair it.

Read Next: How Much Does Boat Insurance Cost?

Legal and Regulatory Risks to Being Uninsured

Whether or not boat insurance is mandatory depends on factors like your state, marina, and whether you have a boat loan. Becoming familiar with the legal criteria for your unique situation is essential. 

• State & Marina Requirements: Some states require boat insurance for specific vessels or activities. Also, many marinas ask for proof of coverage so that you can dock or store your boat in their facilities. 
• Loan & Lender Requirements: If you’ve financed your boat, your lender may mandate an insurance policy.

How Boat Insurance Protects You on the Water

Boat insurance adds an essential layer of protection, helping you feel more confident and prepared every time you head out on the water.

• Collision with Another Boat: If your boat collides with another vessel and you’re at fault, you’ll be personally responsible for the damages. Boat insurance can also come in handy if your boat gets hit by an uninsured boat.
• Environmental Damage Liability: As a boat owner, you’re liable for clean-up and other expenses from fuel or oil pollution or contamination caused by your vessel. With no boat insurance, you’ll have to cover them out-of-pocket.
• Emergency Towing Costs: Things may not go as planned, and you might find yourself stranded in the water after an accident or breakdown. Unless you have specialized towing coverage like Sign & Glide®, you’d have to foot the bill for towing.

How to Avoid These Risks

These tips can help you reduce the risks of boating so you can protect your boat and finances. 

• Understanding Affordable Insurance Options: Boat insurance is affordable. While your premiums will depend on your location, the type of vessel you have, and the policy you choose, you may save money with basic coverage and discounts.
• Customizing a Policy for Your Needs: The ideal boat insurance plan should provide the coverage you need at a price you can afford. As you consider your options, consider your budget, boat value, and risk tolerance.
• Taking Action Before an Accident Happens: Since an accident or another unforeseen event, such as a fire, theft, or severe weather, can happen when you least expect it, year-round coverage is worthwhile. Otherwise, you may be forced to pay out-of-pocket damages because your policy has expired.

Once you invest in boat insurance, you and your crew can relax and make the most of your time on the water. Having a policy can protect your finances and ensure you’re prepared for any incident that might come your way. Get a quote today to explore your options and begin enjoying the carefree boating experience you deserve

Flight insurance can be worthwhile if you can’t afford to lose the money you paid for nonrefundable airfare when unexpected circumstances disrupt your travel plans. This can include delays and cancellations. Flight insurance is also worth considering if you can’t get a refund or credit for airfare through the airline or the credit card you used to book the trip.

If you have many nonrefundable trip expenses, such as pre-paid excursions and hotel accommodations, buying a comprehensive travel insurance policy to cover your entire trip is likely a better option than flight insurance.

Compare & Buy Travel Insurance

What Flight Insurance Covers

The best travel insurance policies with pre- and post-departure benefits compensate you for trip costs—including nonrefundable plane tickets—if you cancel a trip for reasons covered by your policy.

Some flight-specific insurance policies cover cancellations, while others do not, and the same goes for medical expense coverage. It varies significantly depending on the policy you buy. Though these policies may have names that include the term “flight insurance,” such policies are targeted for flight snafus and generally don’t reimburse you for airfare costs. They have limited coverage designed for flight inconveniences.

For example, Flight Insure Plus from Travelex provides $10,000 to pay for emergency medical expenses if you get sick or injured during your trip, and $100,000 for medical evacuation. It also provides coverage for trip delay, accidental death and dismemberment, and baggage. The Flight Insure Plus plan doesn’t include flight cancellation or trip cancellation benefits, so it doesn’t reimburse you for airfare.

Berkshire Hathaway Travel Protection’s AirCare policy does not cover medical expenses. It covers tarmac delays, flight and baggage delays, lost luggage and missed connections. If your flight is canceled, you get $150 for the inconvenience, but the policy does not cover trip cancellation or reimburse you for airfare.

If you buy a comprehensive travel insurance policy to cover your flight, it will generally include the following types of coverage, up to the policy limits.

Trip cancellation. Trip cancellation pays you for pre-paid and nonrefundable trip expenses. This can include airfare if you cancel due to emergencies listed in your policy.

Medical expenses. Travel medical insurance pays for medical expenses if you get sick or injured during your trip and medical evacuation insurance helps pay for emergency transportation if you require treatment unavailable locally.

Trip delay. Travel delay insurance provides money for food, lodging and other expenses you incur if your trip is delayed due to a problem covered by the policy and after a specified period of time.

Trip interruption. Trip interruption insurance lets you recoup pre-paid and nonrefundable trip expenses if you cut a trip short because of a problem covered by your policy.

Baggage coverage.  Baggage insurance benefits pay the depreciated value of lost, stolen or damaged baggage and personal items. Baggage delay insurance helps pay for extra costs such as toiletries if your belongings arrive after a required amount of time listed in your policy.

What’s Not Covered by Flight Insurance

Flight insurance doesn’t cover the following:

• Cancellations that are in your control. Flight insurance won’t pay out if you decide to cancel your trip for a reason that’s not listed in your policy.
• Changes you make to your itinerary. If you switch up your travel plans and reschedule your flight for personal reasons, flight insurance benefits won’t apply.
• Expenses that are refundable. If you can get reimbursed for your airfare or other trip expenses, you won’t qualify for a flight insurance claim. So if you get a refund from the airline, you can’t also make an insurance claim for the same expense.

If you’re only concerned about getting your money back for a canceled flight or one that’s delayed, you may not need flight insurance. A federal law mandates that airlines refund your airfare if your flight is canceled or significantly changed and you don’t accept an alternative flight or travel credits.
 – Michelle Megna, Lead Editor

Our Picks: Best Travel Insurance

Company & top-scoring policy name	Forbes Advisor rating	Average travel insurance cost	Emergency medical and medical evacuation coverage limits per person	Learn More
IMG iTravelInsured LX	5.0	$587	$500,000/$1 million	See PlansVia Forbes Advisor’s Partner
Nationwide Cruise Luxury	4.9	$399	$250,000/$1 million	See PlansVia Forbes Advisor’s Partner
WorldTrips Atlas Journey Elevate	4.8	$258	$250,000/$1 million	See PlansVia Forbes Advisor’s Partner
Seven Corners Cruise Insurance	4.7	$446	$250,000/$500,000	See PlansVia Forbes Advisor’s Partner
Starr Insurance Premier	4.6	$511	$250,000/$500,000	See PlansVia Forbes Advisor’s Partner

Source: Forbes Advisor Research. Average costs are based on various trip costs, ages and number of travelers.See More

How Much Is Flight Insurance?

What you pay for flight insurance can vary significantly depending on the type of policy you buy and where you buy it from. A bare-bones policy designed for post-departure problems will cost much less than a comprehensive travel insurance policy. And, a policy with generous benefits purchased directly from a travel insurance company will usually cost more than a policy with lower limits you buy through the airline when booking your trip.

Your age and the total trip cost you’re insuring can also affect what you pay for travel insurance.

For example:

• An AIG Travel Guard international policy sold by United Airlines costs $189 for a 17-day trip for two travelers age 40. That’s for an economy class flight costing $2,481 for both travelers. It provides $10,000 in medical expense coverage and $50,000 in medical evacuation coverage, per person.
• A Travel Guard Preferred policy from AIG for the same trip and travelers with a total trip cost of $6,000 is about $431. That’s about $240 more than the policy sold by United but it has much better higher limits for benefits. For example, it provides $50,000 in travel medical expenses and $500,000 in medical evacuation coverage, per person.
• A Flight Insure Plus plan from Travelex costs just $58 for the same trip and travelers, but does not include cancellation coverage and provides $10,000 in medical expense benefits and $100,000 in medical evacuation coverage.

Find Policies Now

How to Get Flight Insurance

• You can buy a policy from an airline after purchasing your plane tickets. This is typically through a partnership between the airline and a travel insurance company.
• You can buy a policy from a travel provider after booking your trip, which is also usually through a partnership with a travel insurance company.
• It may be offered by your credit card company when you use the credit card to book your trip.
• You can buy a comprehensive travel insurance policy from a travel insurance company.
• You can buy a travel insurance policy from a travel insurance company that’s designed for air travel mishaps and includes benefits for flight and baggage delays, but may not cover airfare.

If you fly on Delta or American Airlines, which partner with Allianz Travel, you can buy comprehensive travel insurance. This policy includes benefits for trip interruption, trip cancellation, trip and baggage delay coverage and travel medical insurance for international trips. United, Expedia, and Travelocity offer standard travel insurance through AIG, which sells Travel Guard policies.

No one enjoys the telltale signs of a ticket stuck under your windshield wiper or in your mailbox. If you don’t want to pay a fine or you’re a high-risk driver, tickets are bad news. But not all tickets are created equal. Some can have longer-term consequences.

We’re going over what tickets don’t affect insurance and other ways to help keep your premium from skyrocketing out of control.

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Do tickets affect car insurance?

Traffic violations usually result in penalties assessed through tickets. Once a violation has been noted, a ticket is issued on the spot or by mail that details the driver’s name, address, any rules broken, and the amount owed.

Once a ticket has been issued, the motorist has two options: pay the fine or contest it in a court of law. Depending on the nature of the incident, it can even end up on your driving record. Violations on your driving record are more likely to increase the cost of your car insurance.

5 tickets that will not affect your insurance premiums

Every car insurance company sets its own criteria for the types of tickets that affect premiums. Common traffic violations that are less likely to inflate your insurance premiums include:

1. Parking tickets 

As long as you pay your parking ticket on time, it doesn’t end up on your driving record. Overdue tickets may go on record to raise your premium. Not paying on time subjects you to the following risks: 

• Vehicle towing
• Increased fines
• License revocation
• Unpaid tickets could negatively affect your credit score

Try to avoid getting a parking ticket in the first place or prove your innocence in court.

2. Red-light camera tickets 

If you get caught rolling past a red light without stopping, you’ll be fined. Most states — except California, Oregon, and Arizona, consider this violation to be a non-moving violation, and it often doesn’t end up on your driving record. 

However, just like with other tickets, failure to pay on time can put you at risk for higher insurance premiums. For your driving record and your safety, come to a full stop at traffic lights. 

3. Windows too heavily tinted 

If your window tint doesn’t follow the regulations of your state, you can be issued a ticket for it. The fine itself depends on the state and for the most part, it is a non-moving offense so it is not likely to end up on your driving record. 

If you fail to pay on time or have multiple tint-related violations, it can go into your record. So, the best course of action is to keep your window tint within the required limit in the first place.

4. Not wearing a seatbelt

If you are in a state that considers lack of fastened seat belts as a non-moving offense (like Florida), the violation will not be on your driving record or affect your insurance premium.

The safest bet is to wear a seat belt whenever you are in the car. 

5. Fix-it tickets

Fix-it tickets are issued by law enforcement officials to get the vehicle owner to follow regulations. Issues can range from a broken tail light to a loud muffler. However, most fix-it violations are non-moving and don’t make it on your permanent driving record. 

If you pay on time, your driving record will not be affected and in turn, your insurance premium will not be raised. However, if you fail to pay the fine on time, your premium can go up. The best way to avoid this situation is to immediately comply with the fix-it ticket’s request and pay the fine. 

Common tickets that will impact your insurance rates

Certain tickets will directly impact your insurance premium. Examples include:

• Hit and run
• DUI
• Refusal of DUI checks like a breathalyzer
• Racing
• Reckless driving
• Suspended license
• At-fault accident
• Driving with an open container
• Passing a school bus
• Improper passing
• Illegal turn
• Wrong lane
• Failure to yield
• Speeding in school zone
• Driving too slowly
• Cellphone use while driving
• Not-at-fault accident
• No seat belt while moving
• Driving without lights

6 Ways to avoid an increase in your car insurance premium 

Some simple steps every driver can take to avoid an increase in their car insurance premium:

1. Enroll in a traffic school

In some US states, you can avoid certain tickets or their repercussions on your driving record by attending a defensive driving course to help ascertain your mistakes. You may need to pay a fee for this course. 

2. Request a deferment

You can plead guilty and file for a deferral. The court can place you on probation for a predetermined period. If you complete it with no citations, your driving record will remain unaffected. 

3. Contest any unfair or inaccurate tickets in court

If you firmly believe that a ticket is unfair, you can go to the court and argue your case. For serious violations that will affect your driving record or insurance premium, hire an attorney. 

Here are some other ways of reducing your car insurance premium.

4. Reduce your coverage

You can reduce your car insurance coverage to save up some money on a premium. However, be prepared for poor coverage if you eventually have to file a claim after an accident. 

5. Avail of discounts

You can ask your insurance provider if any discounts are available to help lower your premium. If you are shopping for a policy, you can find the best option available by asking each insurer about it. 

6. Improve your credit score

In many US states, insurance companies calculate your insurance premiums based on your credit scores. Learn how to improve your credit score in 3 months. 

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Not All Tickets Are Equal

Car insurance can be expensive, and traffic violations vary in impact. By understanding which ones affect your record, you can try to avoid a hike in premiums. Different state laws and insurers can also affect the outcome. Parking tickets, fix-it tickets, and window tinting tickets usually won’t raise your insurance rates. 

FAQs

Do all tickets go on your record?

No, not all tickets go on your driving record. Parking tickets, fix-it tickets, and seatbelt tickets don’t go into your driving records if you pay them on time.

Is it worth fighting a ticket?

If you are confident about your position, you can contest a ticket in court. You will likely need evidence that the ticket doesn’t apply to you. 

Do insurance companies care about points?

Depending on the state, car insurance companies may raise the premium if you lose points on your driving license.

In This Article

• Avoid Duplication
• Individual Named Insured Endorsement
• Autos Not Covered
• Physical Damage
• Frequently Asked Questions

As a general rule, autos owned by a business should be insured under a business auto policy, and vehicles owned by an individual should be insured under a personal auto policy. However, it gets more complicated for sole proprietorships. Here’s what to know about insuring cars under a commercial auto policy.

Key Takeaways

• It’s best to avoid covering the same vehicle under two different policies.
• Sole proprietors may be able to insure personal cars under a commercial policy.
• Individual Named Insured endorsements may provide some coverage for your family, but not in all situations.

Avoid Duplication

If you are a sole proprietor, you may own both commercial vehicles (like trucks and trailers) that you use in your business and private passenger autos that you use for non-business purposes. Commercial autos owned by business entities must be insured under a business auto policy.¹

Note

While you could insure your personal-use autos under a separate personal auto policy, this is a bad idea.

Both commercial and personal auto policies provide automatic coverage for vehicles you acquire after the policy inception date. Both provide auto liability coverage for a vehicle used as a temporary substitute for a covered auto that is out of service. The policies may overlap.

Coverage overlaps may also occur between rented and non-owned autos. Most personal policies afford liability coverage to insured parties while driving autos they don’t own, including rental vehicles. A commercial auto policy covers hired autos (rental vehicles) and non-owned autos for liability (depending on the insurance symbol).

Duplicate coverage is a waste of premium dollars and can lead to coverage disputes, particularly when the business and personal policies have been issued by different insurers. If an accident causes injury or damage that either policy could cover, the insurers might disagree on which one is liable for the loss.

Individual Named Insured Endorsement

If you are a sole proprietor, your personal-use vehicles can be insured under your commercial auto policy via a standard ISO endorsement entitled Individual Named Insured. The endorsement adds personal auto coverage to a commercial policy. It is available only if your business is a sole proprietorship.

Who’s Covered?

The endorsement amends the definition of you and your to include your spouse. Your spouse qualifies as a named insured as long as he or she is a resident of your household. However, your spouse is not entitled to receive notice of cancellation. If your insurer cancels your policy it will send notice to you only.

The endorsement covers your family members as insureds while they are using covered autos you (or your spouse) own that are private passenger-type autos. This term means cars, vans, and pickups not used for business purposes (other than farming or ranching). 

Your family members are also covered while driving autos you don’t own. For example, your teenage son borrows a neighbor’s car to run an errand and is involved in an accident in which another driver is injured. If the injured driver sues for son for bodily injury, your policy should cover the claim. Your liability insurance applies as excess coverage over any insurance available under the neighbor’s policy.

Note

The term family member means anyone related to you by blood, marriage, or adoption who is a resident of your household. It includes wards and foster children.

No Fellow-Employee Exclusion

The Individual Named Insured endorsement eliminates the fellow-employee exclusion with regard to injuries sustained by your fellow employees or those of your family members. The exclusion is eliminated because most personal policies do not exclude suits by fellow employees of insured parties.

Autos Not Covered

The Individual Named Insured endorsement does not cover your family members while driving any of the following types of vehicles.

Autos Owned by Family Members

For example, your 20-year-old daughter owns a car that is registered in her name. Neither she nor any other family member is an insured under your commercial auto policy while driving her vehicle.

Auto Furnished or Available for Your (or a Family Member’s) Use

For instance, your wife’s employer provides her with a company car. Neither she nor any other family member is insured under your commercial auto policy while using her company car.

Auto Used To Sell, Service, Repair, or Park Autos

For example, your teen-aged son works part-time at a garage that provides valet parking. Your son is not an insured under your commercial auto policy while parking customers’ cars.

Autos Used for Other Business or Occupations

For example, your daughter owns a two-ton truck that she uses in a landscape design business she owns. Your daughter is not insured under your commercial auto policy while using the truck.

Physical Damage

The Individual Named Insured endorsement makes one important change under physical damage coverage. If you own a private passenger-type vehicle that is covered for physical damage, then physical damage coverage applies to any non-owned auto.

The term non-owned auto has a different meaning in the endorsement than in the commercial auto policy. In the endorsement, it means any private passenger vehicle, pickup, van, or trailer that is being operated by, but is not owned, by you or any family member. The definition excludes any vehicle that is furnished or available for regular use to you or a family member. The most your insurer will pay for physical damage to any non-owned trailer is $500.

To see how this coverage applies, suppose that you own a private passenger vehicle that is insured under your commercial auto policy for liability, comprehensive, and collision. Your teenage daughter is driving a car she has borrowed from a neighbor when she skids on a patch of ice and hits a tree. She isn’t hurt but the car is damaged.

Because a private passenger-type vehicle you own is covered for physical damage, that coverage extends to autos you don’t own. However, this physical damage coverage is excess over any coverage afforded by the vehicle owner’s policy. If the owner of the vehicle hasn’t insured it for physical damage, your physical damage insurance should cover the loss (subject to the applicable deductible).

Definition

Water damage legal liability insurance provides financial protection to a person or business that causes water damage to the property of another.

Key Takeaways

• Water damage liability insurance protects against unintentional damage to another’s property.
• Coverage is typically included in renters, homeowners, and condo insurance policies.
• Insurance only covers sudden events, like burst pipes or malfunctioning appliances.
• Damage from poor maintenance or negligence is usually not covered under these policies.
• Umbrella policies offer broader liability coverage than standard homeowners insurance.

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What Is Water Damage Liability Insurance?

Water damage liability insurance is a type of policy that provides financial protection against unintentional water damage caused to another person’s property.

This coverage is often included in renters, homeowners, and condo insurance policies.

Water damage liability insurance covers damages resulting from sudden or accidental events, such as a burst pipe or a malfunctioning appliance.

It’s important to review insurance contracts to understand the extent of water damage coverage.

Condo owners who could face out-of-pocket repair costs without water damage liability insurance are one example of the potential financial impact if such a policy is not in place.

Understanding the Mechanics of Water Damage Liability Insurance

Water damage liability insurance is a kind of liability insurance. Liability insurance is a type of coverage that protects an individual or business from the risk of being sued or held legally responsible—that is, liable—for something.

Liability insurance policies can cover both legal costs and any payouts for destruction, damage, or injury, however inadvertent, for which the insured is deemed responsible. There are various situations when water damage liability insurance could help protect an individual from enormous costs.

For example, let’s say the owners of a second-floor condo unit experienced a water heater explosion and the water leaked into the first floor. Water damage liability insurance would protect the owners of the second-floor condo by providing the money to repair the damage to the first-floor units. Without the insurance, the second-floor owners could be held responsible for paying for the repairs out of pocket.

How Homeowners Policies Cover Water Damage Liability

Homeowners insurance policies generally include water damage liability, either as part of the personal liability coverage or in a separate rider. If you have a mortgage loan, your mortgage lender will likely require you to buy homeowners insurance but not mandate a separate policy for water damage liability.

Generally, the water damage must result from a sudden event or accident—something unforeseen and inadvertent like a leaking air conditioner, burst pipe, malfunctioning washing machine, or the aforementioned water heater rupture. The liability extends to damage, destruction, or injury to others’ structures, belongings, or even people.

However, if the triggering event and ensuing water damage are caused by poor maintenance, misconduct, or deliberate carelessness, then the liability coverage might not apply, or your insurance company might reject the claim.¹

Warning

Be aware of policies that limit your coverage for water damage and liability. Some homeowners insurance policies have sublimits within the contract that impose a cap on claim payouts associated with water damage.²

Enhancing Your Water Damage Liability Coverage

Not all policies include legal liability insurance for water damage legal liability insurance, so it is important to read the insurance contract carefully.

Expanding Your Current Policy for Better Water Damage Coverage

A more common issue is not the existence of the coverage but the extent of it. Most standard homeowners policies provide a basic limit of liability of $300,000 for property damages or injuries. This coverage amount can be increased for an additional premium, but often only to a specified limit.

Umbrella Policies: Extending Your Liability Protection

If you want broader liability coverage than that provided by your homeowners insurance, you could purchase what is commonly called an umbrella insurance policy. Personal liability insurance makes payments on the policyholder’s behalf in cases of at-home and auto accidents, as well as situations that involve libel, slander, vandalism, or invasion of privacy. The policy also covers injuries that occur at secondary residences or seasonal homes, within recreational vehicles, on the premises of rental properties, or on a boat or watercraft owned by the policyholder.

How Does Water Damage Legal Liability Insurance Work?

Typically, water damage legal liability insurance protects you if water damage results from a sudden event or accident like a burst pipe or broken washing machine. The liability protects you financially from damage caused to other people and their property.

How Do I Increase My Water Damage Legal Liability Insurance?

The standard homeowners insurance policies usually provide a basic limit of liability protection for water damage. You can increase the coverage, but it will also increase your monthly premium. You can also buy an umbrella policy, which provides broad coverage of personal liability, including slander, libel, accidents, and water damage.

What Claims Are Not Covered by Water Damage Legal Liability Insurance?

If the event causing the water damage resulted from poor maintenance, malfeasance, or deliberate carelessness, then the water damage liability coverage might not apply, meaning the insurer would deny the claim.¹

The Bottom Line

Water damage liability insurance provides a policyholder with financial protection from accidents and unforeseen events (such as burst pipes or malfunctioning appliances) that cause water damage to other people or their property.

Typically, the standard homeowners, renters, or condo insurance policy includes water damage legal liability insurance, but you can increase the coverage as needed.

There are potential limitations to water damage liability coverage, such as exclusions for poor maintenance.

Key Takeaways

• Windstorm insurance covers damage from gusty events like tornadoes and hurricanes.
• It is often required by lenders in high-risk areas.
• Standard homeowners insurance usually excludes damage from windstorms and requires a separate rider.
• The policy can cover home and personal property damage but not flood damage.
• Filing claims quickly is crucial to prevent further damage and get compensation.

What Is Windstorm Insurance?

Windstorm insurance is a special type of property-casualty insurance that protects policyholders from property damage caused by gales, winds, hail, and other gusty hazards. A subset of storm insurance, windstorm insurance is usually offered as a rider on a standard casualty insurance policy through the extended coverage endorsement.

Understanding the Mechanics of Windstorm Insurance

Windstorm insurance covers the types of excessively gusty events, such as hurricanes and cyclones, that are often considered vis major and so might be excluded from standard homeowners insurance policies.

Those who live in areas susceptible to this type of peril must purchase this additional coverage to protect themselves. Residents of coastal and midwestern states, where hurricanes and tornadoes are relatively common, fall into this category.

If you have a mortgage loan and live in a high-risk area for windstorms, your mortgage lender may require you to purchase windstorm insurance.

Coverage Details of Windstorm Insurance

Windstorm insurance will typically cover physical damage to the property and personal belongings inside the home. Many policies also include coverage for detached structures, such as garages and sheds. When big winds harm roofs and windows, rain and debris can cause additional damage. In such cases, most policies will cover repairs as long as the claim is filed soon after the event.

Exclusions in Windstorm Insurance Coverage

Sometimes, windstorms are followed by storm surges and flooding, but windstorm insurance will not typically cover damage caused by these rising waters. Flood insurance coverage provided by the federal government must be purchased separately, and it takes 30 days to go into effect.¹²

Important

Neither windstorm insurance nor homeowners insurance will cover repairing or replacing a vehicle damaged by a wind-toppled tree or other blowing debris. You must carry a comprehensive auto insurance policy to cover a car.³

Steps to File a Windstorm Insurance Claim

To file a windstorm insurance claim, you must take certain steps. The most important thing is to act quickly. Many policies limit the time frame to file a claim for storm damage. Often, this is because failure to fix problems promptly can lead to more damage later.

Immediately after a windstorm, a windstorm insurance policyholder should:

1. Record the storm date and save news articles about the storm as proof.
2. Assess and record all damage that they see from the ground with pictures and/or video.
3. Have at least two reputable contractors inspect the property and provide written estimates for repairs.
4. Contact the claims department of their insurance carrier, provide all the information they have gathered, and request a visit from a claims adjuster.
5. Ask one of the contractors to be present during the insurance adjuster’s inspection to ensure a fair assessment.
6. If a claim is denied, request another evaluation. Policyholders are entitled to meet with three different insurance adjusters.

What Is the Difference Between Homeowners Insurance and Windstorm Insurance?

Homeowners insurance protects you financially from structural damage to your property, theft or damage to personal belongings, and liability. Homeowners insurance may cover wind damage due to hurricanes, but it may not cover a high-risk area like along the coast for wind damage. As a result, you would need windstorm insurance if your home is in a coastal area.⁴

Are You Required to Get Windstorm Insurance?

Typically, you are not required to get windstorm insurance. However, if you live in a coastal area prone to wind damage and have a mortgage loan, your mortgage lender may require you to buy windstorm insurance.⁴

How Much Does Windstorm Insurance Cost?

Windstorm insurance can cost approximately $2,000 per year in coastal or high-risk areas. However, the cost can vary depending on the size of the home, its location, and the insurer.⁵

The Bottom Line

Windstorm insurance covers excessively gusty events, including hurricanes and cyclones, often excluded from a homeowners insurance policy. Those living in high-risk areas must purchase windstorm insurance in addition to their homeowners insurance. However, storm surges and flooding that follow a windstorm and cause property damage may not be covered by windstorm insurance.

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