Under-Insuring Can Cripple a Home

"Content coverage is very expensive, and we couldn't afford it," Buchanan said. "We lost every stick of furniture, and all of our appliances were ruined, so we had to buy a new refrigerator, stove and washer."

Recently they got word their house must also be elevated off the ground to qualify for future NFIP insurance. Coverage for that process, which Buchanan said will cost an estimated $43,000, is available under another FEMA policy that pays up to $30,000. They have petitioned through the city of Hampton for a grant from FEMA to cover the remaining $13,000 but have not yet heard a verdict.

By contrast, homeowners suffering only wind damage are covered directly under the homeowners policies. William Allen, 57, had several holes torn in his roof when Hurricane Andrew hit his three-bedroom Homestead, Fla., home in 1992.

Because the damage to his home and his water-logged furniture was caused by Andrew's winds and not flooding, the Allens were able collect $120,000 from their insurance company within a couple of months.

"We were lucky. We lived high enough on a plain that we didn't even need flood insurance," Allen said.

Many people hold dreams of living on coastal property, but the Insurance Information Institute's Salvatore said buyers must be aware of coastal weather patterns and insure their home accordingly.

"You may still want to buy the home, but you need to know the potential for weather disasters and the economic commitment that goes along with that," she said.