In the aftermath of Hurricane Irma and with the uncertainty of other hurricanes looming in the Atlantic, we have been getting a lot questions about hurricane deductibles and homeowners insurance. There are a good amount of misconceptions about hurricane deductibles, and we’d like to try to clear them up.
Do I pay a deductible per hurricane?
A hurricane deductible is an annual deductible. You do not have to pay the hurricane deductible per hurricane. It is the maximum amount you will pay out of pocket in one year. So if Hurricane Maria were to hit and damage your home and you already have damage as a result of Hurricane Irma, you are looking at paying the hurricane deductible once, not per hurricane.
Wind/Hail ≠ Hurricane
After hail storms passed through our area, we had a lot of people filing claims and asking if their hurricane deductible is the same as their wind or hail deductible. The answer is usually no. On most policies, hurricane deductibles only apply to hurricanes. Other types of storms are covered under wind or hail. Wind and hail are usually covered under your "all other perils" deductible. For the most part, this is good news! Most all other perils deductibles are significantly less than hurricane deductibles.
How much is my hurricane deductible?
I would say about 80% of the home insurance policies we write have a 2% hurricane deductible. When we say 2%, that is 2% of your dwelling coverage (how much your house is insured for). So if your house is insured for $200,000, that means that you will have to pay the first $4,000 (2% of $200,000) of damage to your house as a result of a hurricane. Unfortunately, this is now common for home insurance in Central Florida. After the hurricanes in 2004, 2% deductibles have become the new normal. We only work with a few companies that have hurricane deductibles lower than 2%.
$ave, $ave, $ave
What does this mean for you? You need to be putting a good chunk of cash aside in the event that a hurricane does hit. If a storm were to hit and your house is damaged, you could be looking at $2,000 - $6,000 out of your pocket before your insurance company pays out a single penny! If this is unrealistic for you and your family, then maybe you should look into getting a policy with a $500 hurricane deductible. Expect to pay about 20%-30% more for a policy with a lower deductible. It is more expensive, but if you have a hard time putting money aside, it could save you from being put in that type of situation.
Hurricane deductibles are high in Florida, but that's because we are in hurricane alley! The good news is there are ways to prepare for these high deductibles. The bad news is it requires you to either put money aside or pay more for your homeowner's insurance policy. Want to chat about your homeowner's insurance policy? We're happy to be your go-to insurance agent in Central Florida. Harrell Agency Services is a family-owned company, conveniently located in downtown Kissimmee.