Unlike a typical homeowner's insurance policy deductible of $500 or $1,000, hurricane deductibles usually are listed as 1 percent to 5 percent of a property's insured value. The owner of a home with dwelling coverage of $200,000 and a 2% hurricane deductible would pay the first $4,000 of damages from a storm.
A hurricane deductible can be a useful thing. It's a higher deductible than your regular one, and does "lower" the annual premium you pay.
Hurricane deductibles were developed in response to 1992's Hurricane Andrew, which racked up a $15.5 billion bill for insured losses, the most ever from one storm, according to the Insurance Information Institute. As a result, insurers had to lessen their future risks by having policyholders assume more responsibility in the form of higher deductibles, the institute says.
After the recent Hurricane Matthew, we had to tell all or clients with hurricane damage that their hurricane deductible applied.
For 90% of our clients the damage estimate from the claims adjuster was less than the deductible. For example one client's policy has a Coverage A (Dwelling) value of $175,000, and a 2% hurricane deductible of that value ($3,500). The client filed a claims, the claims adjuster assessed the damage, and the damage was assessed at $3,300. So the letter they received was that since the damages were less than their deductible, the responsible for repairs was theirs.
But a small 5% of our clients selected to have a $500 hurricane deductible. Yes their annual premium was higher, but only by an average of $9.50/month.
Should you consider lowering your hurricane deductible? Call us from to discuss.
EMERGE INSURANCE AGENCY
Cecil Williams -