Hurricanes and other major storms can wreak enormous damage across huge swaths of land.
As a result of storms like hurricane Andrew (1992), Katrina (2005), and Sandy (2012), some insurance companies became insolvent and were unable to pay fort heir claims.
In order to protect consumers from insurance company’s becoming insolvent, many states have allowed for a separate, and often much higher wind, hail, and/or hurricane deductible.
What is a hurricane deductible?
The hurricane deductible is for covered damage caused by hurricanes that are officially named hurricanes by the US National Weather Service. It is also important to note that even if a weather channel names a hurricane like Katrina or Andrew, this does not automatically qualify your coverage; it must be deemed a hurricane by the National Weather Service. Additionally, any flooding may not be covered. I know… more red tape!
What is a windstorm deductible?
The windstorm/wind deductible only applies for wind-related damages on a covered loss. For example, “Tornado Alley” (Midwestern United States) is commonly affected by non-hurricane wind damage from tornadoes, windstorms, etc., so if you are in this region of the country, you may not utilize the hurricane deductible at all.
How is this different from my standard home insurance deductible?
Typically, but not always, a wind, hail, or hurricane deductible is expressed as a percentage of your overall dwelling limit. These deductibles often range on average from .5-5% of the total dwelling limit. The deductibles vary depending on your where you live within a state, and the insurance company’s risk appetite.
Example of a hurricane deductible:
If you insure your home for $300,0000 and have a 3% hurricane, deductible, you would have to pay $9,000 before your insurance kicks in. If you had a 5% deductible, you would have to pay $15,000 out of your own pocket.
We try to keep the wind, hurricane, and or hail deductible as low as possible, because we don’t believe people expect to a huge deductible (like $15,000) when they already have insurance. In our online quote comparison, we convert the percentage to a real dollar value, to be explicit about the cost corresponding to this deductible.
Having a separate wind, hail, and/or hurricane deductible can be both frustrating and confusing. In writing this blog, our goal is not to discuss details on what or would not be covered (we never like to discuss hypothetical claims), but rather to provide an overview on the different deductibles, and why you should be careful when selecting which is best for you. None of what was included above should be considered specific guidance on what is or is not covered in a certain policy. Those details depend entirely on the policy you select. If you need help understanding your policy, or more details on your wind, hail, or hurricane deductible, one of our licensed representatives will happily assist!
