What is a hurricane deductible?

October 10, 2018 | Tower Hill Insurance

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Most homeowner policies in Florida have a separate deductible for windstorm losses. Here’s what you need to know. . . .

Most Homeowner policies in Florida that provide windstorm coverage have a separate deductible for hurricane windstorm losses. This deductible might be a dollar amount, or more likely a percentage:

  • HO3 Homeowners policy, DP-3 Dwelling Policy and MH Mobile Home policy – Percentage of your Coverage A limit.
  • HO4 Renter’s policy – Percentage of your Coverage C limit.
  • HO6 Condo policy – Percentage of the higher limit – Coverage A or Coverage C.

The percentage is calculated and the equivalent dollar amount is listed on the policy’s Declarations page.

Per the Florida Office of Insurance Regulation, the hurricane deductible applies only if the windstorm damage occurs during a hurricane named by the National Hurricane Center of the National Weather Service. Per Statute, the duration of the hurricane:

  • Begins when a hurricane watch or warning is issued for any part of Florida;
  • Continues while hurricane conditions exist anywhere in Florida; and
  • Ends 72 hours following the termination of the last hurricane watch or warning.

This separate deductible applies for a calendar year (January 1 to December 31). No matter how many storms hit Florida and no matter how many times the home is damaged, the Insured is responsible for this deductible once during the calendar year. After they have met the hurricane deductible, it no longer applies to any subsequent covered windstorm losses after a hurricane watch or warning has been issued. Instead, the All Other Perils (AOP) deductible will apply for each subsequent loss.

If the Insured has not met the Hurricane Deductible and experiences a subsequent loss, the deductible will be either the remainder of the hurricane deductible or the AOP deductible, whichever is greater.

It’s important to be aware that all expenses are subject to this deductible, even those for emergency repairs. The Insured is required to make emergency repairs and prevent further loss. These expenses are included when the adjuster calculates if the Insured has met the deductible. When the Insured obtains a repair contractor to tarp the roof or extract water after a hurricane, the contractor will typically ask for payment because their bill is likely to be within the hurricane deductible amount.

An example:

  • Insured has Coverage A of $280,000, a 2% hurricane deductible ($5,600), and a $1,000 AOP deductible.
  • Storm 1 happens on July 20th and Insured has expenses to remove a tree from the roof, tarp the roof, replace 15 shingles, and fix a portion of the fence. The total is $4,300; the insured is responsible for the $4,300.
  • Storm 2 happens on October 7th, and Insured has expenses for water extraction due to broken window, replacement of wood floors in 2 rooms, and damaged contents. Total is $12,000. Insured is responsible for the remaining $1,300 due on the Calendar Year Hurricane Deductible (which is greater than the AOP deductible) and the remainder of the second claim is covered according to the policy terms and conditions.
  • Storm 3 happens on October 20th, and Insured has expenses to repair a damaged soffit. Total is $2,000. Although the calendar year hurricane deductible has been met, Insured is responsible for the $1,000 due on the AOP deductible, and the remainder of the third claim is covered according to the policy terms and conditions.

It is very important for Insureds to keep all their receipts and track the expense total. Remember – this is a calendar year (January 1 to December 31) deductible.

How much is my hurricane deductible?

Depending on your individual policy, hurricane deductibles are either a fixed amount or a percentage of your home’s Coverage A amount (e.g., 2% of $200,000 = $$4,000). This deductible is for windstorm coverage. Your deductible amount will be subtracted from the amount of any loss or claim payment you receive. You will not need to send us any payment for your deductible.

NOTE: Private flood policies written through Tower Hill do not have a hurricane deductible.