What Is a Hurricane Deductible?

Hurricane deductibles are a special out-of-pocket charge that applies to homeowners insurance claims for hurricane damage. They’re typically based on a percentage of the home’s value. You need to pay this amount upfront before the insurance covers any damages. What counts as a hurricane and when this deductible applies varies among states and insurers.

Why the Hurricane Deductible Exists

When Hurricane Andrew hit South Florida in 1992, it caused an estimated $25 billion in damage. Afterward, some insurers introduced hurricane deductibles. This shifted more financial risk onto homeowners൩ while helping to avoid premium increases. Then Hurricane Katrina hit in 2005, causing more than $43 billion in insurance claims.

After these disasters, reinsurers—the backup insurance companies that primary insurers use to ensure claims always get paid—required 澳洲幸运5开奖号码历史查询:homeowners insurance companies in hurricane-prone states to reduce their losses. Hurricane deductibles become widespread in these states.

How the Deductible Works

The hurricane insurance 澳洲幸运5开奖号码历史查询:deductible is the amount of money you must pay toward a hurricane-related loss before your insurance company starts to pay. This replaces your regular deductible and is laid out in the policy. Currently, homeowners in 19 states and the District of Columbia must pay hurricane deductibles instead of their regular deductibles when making a hurricane damage claim.

Windstorm Deductible vs. Named Storm Deꦓductible vs. Hurricane Deductible

Windstorm, named storm, an🧸d hurricane deductibles all have to do with how much you’ll pay in deductibles for wind-related damages. Which deductible applies to your claim depends on the parameters outlined in your policy. See “When the Deductible Applies” below for more information. 

• Windstorm or wind/hail deductible: Applies to any damage from wind or hail, such as a tree branch falling and damaging your home’s roof after a windy day. This is true unless your policy designates that a named storm or hurricane deductible is applicable.
• Named storm deductible: Applies to damage from weather events categorized by the National Weather Service (NWS) or U.S. National Hurricane Center (NHC) as hurricanes, typhoons, tropical storms, and tropical cyclones. The weather event must also have been given a name, such as Hurricane Andrew or Superstorm Sandy.
• Hurricane deductible: Applies to damage from hurricanes designated as such by the NWS or NHC.

States That Require Hurricane Deductibles

In these states, and the District of Columbia, you’ll have a separate hurricane deductible for damage from hurricanes or named storms:

• Alabama
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Louisiana
• Maine 
• Maryland
• Massachusetts
• Mississippi
• New Jersey
• New York
• North Carolina
• Pennsylvania
• Rhode Island
• South Carolina
• Texas
• Virginia
  

State insurance departments review insurers’ hurricane deductible plans to ensure compliance with local laws and regulations. Rhode Island, for example, caps hurricane and windstorm deductibles at 5%. 

When the Deductible Applies

Whether or not you’ll pay a hurricane or windstorm deductible depends on your state’s or insurance company’s definition of a trigger event. The deductible will only apply in certain circumstances, as described in your insuraꦇnce contract.

That’s why reviewing the hurricane insurance details in your homeown༒ers insurance policy is important. Make sure you have copies of the relevant documents in an emergency bag you keep ready in case you have to leave your hꦓome in a hurry.

Below are some ༒examples of hurricane deductibles and﷽ when they apply.

W💛hat Happens If There Are Multiple Hurricanes in a Year?

If you makeꦉ multiple claims for multiple hurricanes, you could pay your hurricane dedu🅘ctible more than once. Read your policy documents to find out whether your deductible applies per event, season, or calendar year. 

For example, Florida has rules that state you only have to pay your hurricane deductible once per calendar year—unless you change insurers after the first hurricane claim. 

Calculating Your Deductible

The hurricane insurance deductible is usually calculated as a percentage of a home’s insured value. A hurricane insurance deductible of 5% f꧂o🀅r a home with $300,000 of dwelling coverage requires the homeowner to pay the first $15,000 of insured damages. 

This differs from a standard homeowners insurance deductible, which is a fixed dollar amount that applies to other types of claims. For instance, you might be required to pay the first $500 of eligible✤ damage on a claim. The home’s dwelling value is irrelevant in this case. 

Florida has a mandated $500 flat fee hurricane deductible option in addition to designated percentages. Premiums may be higher than if you choose one of the other options: 2%, 5%, or 10% of the insured value of the residence.

Frequently Asked Questions (FAQs)

The Bottom Line

Hurricane deductibles were introduced fairly recently following massive hurricanes that caused billions in dama♔ges. These deductibles are only required in certain states and take the place of your regular deductible after a tri⛄gger event. They typically range from 1% to 10% of the home’s insured value. If your policy has a hurricane deductible, understand what you might owe in a worst-case scenario and make sure you have enough in an emergency fund to cover the bill.