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August 19, 2015

Hurricane Deductibles

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Did you get caught off guard when Hurricane Irene struck? Many policyholders did. It is important that you know and understand all of your deductibles and how they can affect you and your family.

In 1998, after Hurricane Bonnie, many insurance companies started formulating various diagrams and deductible models for coastal cities. Based on geographic’s they developed several types of deductibles. They are: Named Storm Deductible, Wind/Hail Deductible or Hurricane Deductible. Each with it’s own definition which determines when the deductible will apply.

In 1999, after Hurricane Floyd, more companies took the demographics of their competitors and created more versions. Over the years, the majority of all insurance companies adopted at least one form of these special deductibles.

Most are a 5% deductible. Meaning whatever your house is insured for you pay 5% for your deductible. Let me give you an example. If your home is insured for $350,000, your deductible could be as high as $17,500. No one is prepared for that type of deductible.

These “Special” deductibles only apply to damages caused by a storm, wind and/or hail. Some insurance companies have also created a new deductible called the “Tropical Storm” deductible. There is a separate deductible for other types of losses.

What do you have? A “named storm” deductible, a “wind and hail” deductible or a “hurricane” deductible?

If yours is a “wind and hail” deductible you are subject to this large deductible year around. We are now in Nor’easter season and past experience has proven that our area tends to suffer more damage during this time of year than from hurricanes or tropical storms. This can place a serious financial hardship on you and your family.

Our homeowners insurance policies also have a 5% “Hurricane Deductible”. The storm has to enter the state as a hurricane for the deductible to apply.

 


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