As Hurricane Irene battered the eastern seaboard, thousands of New Englanders found themselves facing extensive damage to their homes and properties. Unfortunately, many homeowners discovered they weren’t adequately covered for such a horrendous natural disaster.

Insurance for hurricane perils are frequently misunderstood, with many policy holders falsely believing they are covered for any and all damages resulting from the storm. What they fail to understand is that most insurance for hurricane perils covers damage from hurricane rain and winds, but not from related flooding.

Insurance for hurricane perils covers downhill water (i.e. rain), but rising water is considered flooding and thus not covered. In the wake of Irene, many homeowners were shocked to discover that hurricane insurance did not cover damage sustained due to basements full of water. Only those with flood insurance were covered for such losses.

Flood insurance is available through the federally-run National Flood Insurance Program (NFIP) and can be purchased through Foley Insurance Group. Premiums vary depending on whether the property in question is located in a moderate-to-low or a high risk area. Not surprisingly, coastal areas are considered “high risk” and carry a higher premium. The average annual flood insurance premium was $594 in 2010, according to the Insurance Information Institute.

Homeowners also frequently fail to understand that many policies carry a special “hurricane deductible” in 19 states, including much of the eastern seaboard. While homeowners insurance typically carries a flat deductible, a hurricane deductible is based on a percentage of the home’s insured value. A house insured for $200,000 may have a 2 percent hurricane deductible, which means that the homeowner is responsible for the first $4,000 in repair costs, after which the insurance company pays the rest of the claim.

When shopping for hurricane insurance, don’t use the fair market value of your house as the basis for how much coverage to buy. That price includes the value of your land, which is unlikely to be affected by the storm. Instead, insure the structure for the cost of rebuilding or replacing it. And don’t forget to add flood insurance to your policy. While a hurricane may be the furthest thing from your mind, it’s best not to wait until storm clouds begin to gather. As many of Irene’s victims discovered, that’s too late to take action.