Hurricane Deductibles Explained: How They Affect Your Insurance Claim

A hurricane deductible is an increased deductible that homeowners in hurricane-prone areas must pay before their insurance policy kicks in to cover a claim following a hurricane or major tropical storm.

Unlike a standard deductible, which is usually a set amount like $500 or $1000, a hurricane deductible is calculated as a percentage of the home’s insured value. Common hurricane deductible percentages range from 1% to 5%.

For example, if a home is insured for $300,000 and has a 2% hurricane deductible, the homeowners would be responsible for the first $6,000 of damage costs before insurance coverage begins. With a standard $1000 deductible, the homeowners would only pay the first $1000.

When Does a Hurricane Deductible Apply?

Insurance companies enact hurricane deductibles when the National Hurricane Center officially names a storm system. The higher deductible remains in place during the storm and for a certain period afterwards, usually 24 to 48 hours.

This means the hurricane deductible applies even if the storm is downgraded to a tropical storm or depression before it hits your area. The criteria is based on the storm’s status when it formed.

How are Hurricane Deductibles Determined?

In Florida, the state’s Office of Insurance Regulation sets the criteria for when insurers can implement hurricane deductibles. Most companies apply them if any part of the state receives a hurricane warning from the National Hurricane Center.

Insurers then set their own hurricane deductible percentages, usually between 1-5% of the home’s insured value. Older homes or those in high-risk coastal areas often get hit with the maximum 5% hurricane deductible.

Newer inland homes may have lower hurricane deductibles around 1-2%. The percentage should be clearly labeled on your policy declarations page.

How Do Hurricane Deductibles Impact Claim Payouts?

Hurricane deductibles can dramatically reduce the insurance coverage you receive following a major storm.

For example:

  • Home insured for $300,000
  • 2% hurricane deductible = $6,000
  • Total storm damage = $50,000

With a standard $1000 deductible, the insurance company would cover $49,000 of damages. But with the 2% hurricane deductible, the homeowners must pay the first $6,000 out of pocket and only receive $44,000 from insurance.

In severe storms that cause extensive damage, some homeowners may not even meet their hurricane deductible if the damages exceed the total insured value of their home.

Strategies for Coping with High Hurricane Deductibles

Here are some tips to deal with costly hurricane deductibles in the aftermath of a storm:

  • Carefully document all damages, take photos, and keep receipts. Get multiple repair estimates.
  • Ask about any hurricane loss mitigation discounts your insurer offers for storm-resistant features like wind-impact windows.
  • Consider increasing your deductible in non-hurricane months to offset the higher hurricane deductible.
  • Set aside funds in an emergency savings account in case you need to pay the hurricane deductible.
  • Contact your insurance agent right away to start your claim and understand the deductible that will apply.

Fight Back Against Unreasonable Deductibles

If your insurance company applies an unusually high hurricane deductible percentage or refuses to fully cover your legitimate storm damages, don’t put up with it. Contact our experienced Florida insurance claims attorneys who can determine if the insurer is acting in bad faith and fight to get you the maximum compensation allowed under your policy.

Don’t let unreasonable hurricane deductibles prevent you from recovering from a devastating storm. Get expert legal help reviewing your insurance policy and claims payout. Contact our dedicated team today for a free case review.

You can visit our office at 200 Lake Morton Drive, Suite 300, Lakeland, FL 33801.

Or call us today for a free consultation on (833) 941-7867.


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