Understanding your Hurricane Deductible
Hurricane season has just begun and will last until the end of November; it is important for homeowners to have an awareness of what their insurance policy covers and what their hurricane deductible is. This is particularly true for first time home buyers or for homeowners that have relocated to coastal states from non-coastal regions and have not had hurricane coverage in the past. The hurricane deductible will determine the amount of money you must pay out-of-pocket before your coverage kicks in if there is damage to your residence due to a hurricane. Hurricane deductibles are clearly listed in your policy. Eighteen coastal states allow insurers to incorporate hurricane deductibles into their homeowners policies: Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas and Virginia. While traditional, standard homeowners deductibles for fire, theft and other disasters listed in the policy are usually a flat dollar amount, such as $500 or $1,000, hurricane deductibles are generally calculated as a percentage and typically vary from 1 to 5 percent of a home’s insured value.
Hurricane deductibles are triggered only when certain criteria are met. The hurricane deductible triggers vary by state and insurer and usually apply when the National Weather Service (NWS) officially names a tropical storm, declares a hurricane watch or warning, or defines a hurricane’s intensity. Due to these differences, homeowners should check their policies and speak to their agent or insurance company representative to learn exactly how their particular hurricane deductible works. In some states, coastal homeowners insurance policyholders may have the option of paying a higher premium in return for a traditional dollar deductible, depending on how close to the shore their residence is situated. In high-risk coastal areas, insurers often require the inclusion of a hurricane deductible before selling a homeowners insurance policy. Homeowners who have questions about their insurance policy should contact their insurance agent or company representative.
For more information on hurricane insurance, please visit the Hurricane Insurance Information Center at http://www.iii.org/