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III: Coastal home owners must understand Hurricane insurance

III: Coastal home owners must understand Hurricane insurance

Those who own homes in coastal states should take steps to understand the hurricane deductible associated with their homeowners insurance, the Insurance Information Institute (I.I.I.) urged in a recent report.

According to the I.I.I., hurricane deductibles are clearly outlined in home insurance policies, and scrutinizing this fine print will help home owners estimate how much out-of-pocket cost they can expect if coverage is needed due to a hurricane.

“With hurricane season beginning this month and lasting until the end of November, it is important for homeowners to determine whether a hurricane deductible applies to their policy,” Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I., said in a statement.

Hurricane deductibles can apply to home insurance policies in the following 18 states, the I.I.I. said: Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas and Virginia.

The triggering of hurricane deductibles occurs when a specific event, as outlined by the insurer, occurs. Typically, an event – such as landfall of a hurricane – must be confirmed by the National Weather Service (NWS) in order for the deductibles to be officially triggered.

“Hurricane deductibles were put into place to make more private insurance coverage available at competitive rates,” Salvatore said. “With the increase in coastal development, as well as the risk of more severe and costly hurricanes, consumers are now sharing more of the potential catastrophe risk with insurance companies.”

Home insurance policies will vary insurer-by-insurer and state-by-state, but, in general, hurricane deductibles are written as a percentage (typically 1 to 5 percent) of the insured value of a home.

However, in some cases, home owners may have the option to switch to a more standard dollar-amount deductible, the I.I.I. noted.

“Everyone, no matter where they live, should make sure they understand what is and is not covered under their home insurance policy,” Salvatore said. “Homeowners who have questions about their insurance policy should contact their insurance agent or company representative. They can explain hurricane deductibles and other parts of the policy.”


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