Hurricane deductibles

What is a hurricane deductible?

Like an auto, health, or home insurance deductible, a hurricane deductible is the amount of money you pay out of pocket before your insurance benefits kick in to cover a claim. If you live in an area prone to hurricanes, like Florida, your home insurance will have two deductibles:

• The standard deductible. This is the amount you owe when you make a claim for fire, non-hurricane wind or hail, theft, or vandalism damage to the home or your personal belongings.
• The hurricane deductible. This is the amount you owe when you make a claim to cover hurricane-related wind or hail damage to the home or your personal property.

When do hurricane deductibles apply?

In general, wind damage incurred during specific weather conditions and timeframes trigger your hurricane deductible. A hurricane is generally defined as a windstorm of 74 miles an hour or more that touches ground. When the National Weather Service “names” a storm, that’s typically when your hurricane deductible will apply.

Timing is also a factor in triggering hurricane deductibles. For example, the hurricane deductible may apply if the damage occurs:

• Within 24 hours before the storm is named or a hurricane makes landfall.
• Up to 72 hours after the hurricane is downgraded to a lesser storm or a hurricane watch is cancelled.

Insurers and states may have their own hurricane deductible requirements, so ask your provider for clarification. For example, hurricane deductibles on homeowners insurance in Florida apply to windstorm losses that occur:

• When the National Weather Service declares a hurricane.
• During a hurricane watch or warning anywhere in Florida.
• Up to 72 hours after the watch or warning ends.
• During a hurricane season.

To illustrate why these triggers matter, consider Hurricane Sandy. Homeowners across the East Coast were saved perhaps billions of dollars in out-of-pocket damage costs because it was downgraded to a “tropical storm” before it made landfall.

Lastly, keep in mind that hurricane coverage doesn’t address flood damage from storm surges — you must have flood insurance for that protection.

How much are hurricane deductibles?

Hurricane deductibles are a percentage of the coverage you have for your home or a flat dollar amount. For example, we offer a $500 deductible, or deductibles that are 1%, 2%, 3%, 5%, or 10% of your home’s dwelling coverage.

So if you have a 3% hurricane deductible and $300,000 in dwelling coverage for your home, you’d be responsible for the first $9,000 worth of hurricane damage. Your policy can usually cover the rest, depending on its coverage limits and restrictions.

How to choose a hurricane deductible

Hurricane damage is usually extensive. Even though a $9,000 deductible may seem steep, it pales in comparison to the cost of rebuilding your home from the ground up without the financial help hurricane coverage offers.

When choosing your hurricane deductible, keep in mind that the higher the deductible you choose, the lower your premium may be. If your home has certified windstorm mitigation features, such as window shutters, hurricane rated doors, and braced walls and roofs, you might consider a higher deductible because your loss risk is reduced. However, as with any deductible, make sure you select an amount you could reasonably pay in an emergency. Your insurance is only useful if you can use it.