State By State Hurricane Deductible Analysis
Deductibles are the amount of money someone pays before their insurance begins as a way to provide an insurer coverage without paying for the full amount of the damage caused. In particular, property damage caused by a hurricane will have a much higher than a normal deductible.
Since insurance is regulated at the state level, states have different hurricane deductibles. Of the 19 states that have hurricane insurance policy claims, here are just some of the more popular state-by-state analyses.
Texas
In Texas, not only is a deductible applied to storms and hurricanes, but also to any type of wind storm stemming from windstorm and hail damage. An insurer cannot sell coverage without a hurricane deductible if the policy has mandatory deductibles attached to it.
Maine
Of the 19 states Maine is the least vulnerable to hurricane damage. In this state insurers can provide options for windstorm, water, and hail damage. Policyholders are allowed to choose a higher deductible when a deductible is optional.
Louisiana
Homeowners can choose either of the three deductible policies relating to wind damage: hurricane, storm, and windstorm and hail.
Storm deductibles are enacted once the National Hurricane Center reports that a storm has reached a tropical strength with winds of 39 miles per hour. Hurricane deductibles are enacted once the National Hurricane Center reports that a tropical storm has reached 74 mph, which is hurricane strength. Windstorm and hail deductibles are used when houses take damage from winds stemming from any source.
Homeowners insurance policies can’t have an increase in storm or hurricance deductibles by insurers if their policies have been in effect for more than three years. In addition, storm and hurricane deductibles can’t be imposed on more than one hurricane per season. Also, homeowners may be eligible for discounts if their home is built in coroporation with the state’s construction code.
Hawaii
The Hawaii Hurricane Relief Fund was created in 1993 by the state legistlature as a way to provide compensation for damage done by windstorm. In 2000 the fund was shut down once the insurance market became stable.
Homeowners have to purchase hurricane insurance separately from plans since insurers do not provide it. However, property coverage for all other perils and liability is available.
Florida
In Florida, hurricane deductibles are set by law and are the same for private and regular markets. Deductibles only apply once during a hurricane season. All insurers must offer a deductible rate based on the total value of a home. Mitigation discounts and credits must be included by property insurance rate filings.
New York
In this state, the Department of Financial Services has approved hurricane windstorm deductibles if a hurricane that is a Category 1 or higher is making landfall near New York and when a hurricane that has reached Category 1 or higher, with winds of at least 74 miles per hour, is in territory within the state where losses occur.
Mandatory deductibles range from 1 percent to 5 percent of the insured amount. A Category 1 or Category 2 hurricane, designated by the National Weather Service or the National Hurricane Center, can trigger the deductible. There really is not a specific trigger though. It can vary amongst insurers.
An insurer cannot sell coverage without a hurricane deductible if the homeowners policy has mandatory deductibles. A higher deductible may be choosen if a deductible is optional. In any case, hurricane deductibles have to be expressed as a dollar amount. Also, it is the law for insurers to offer cuts to homeowners with hurricane shutters or resistant glass windows and doors.
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