Long Island Hurricane Deductibles

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Homeowners who experience their first hurricane are frequently awestruck by the unharnessed power of Mother Nature. Unfortunately, once the storm passes, they’re often blindsided by the special — and costly — hurricane insurance deductible they didn’t know was buried in their homeowners policy.

How hurricane deductibles work

Unlike most deductibles which has a set dollar rate, hurricane deductible is based on a percentage of your home’s total value. The out-of-pocket cost can be much higher than what you’d face with the dollar-amount deductibles commonly used for fire damage and theft.

If the home you insured for $300,000 has a 5 percent hurricane deductible, you would be responsible for the first $15,000 in hurricane damage as defined by the policy. With a standard, non-hurricane deductible, you might pay just the first $500 of a home insurance claim out of your own pocket.

In some states, homeowners may be able to get a dollar-amount hurricane deductible by agreeing to pay a higher premium, though in high-risk shore areas the percentage deductibles may be unavoidable.

How Hurricane is defined.

You should be aware of the trigger, or benchmark for what qualifies as a hurricane for your policy. For some policies for example, you won’t have to worry about your policy’s hurricane deductible unless the weather service has determined that a Category 1 hurricane has made landfall. You should ask your insurance agent about the trigger for your deductible.

Beware of “Windstorm Deductable”

Even when a hurricane deductible does not apply, homeowners can still find themselves on the hook for hefty out-of-pocket costs.  Some homeowners are subject to a similar percentage-based “windstorm deductible,” which applies regardless of any hurricane declaration.

This isn’t necessarily a bad thing

These kind of percentage deductibles helps keep insurance costs down over all by bringing costs of premiums down in high risk areas.