What is a Hurricane Deductible?

Answer:
Some states are regularly ravaged by hurricanes including

Florida and the entire eastern seaboard. Insurance companies often sell homeowners policies in hurricane-prone areas with a “hurricane deductible” that must be paid instead of the typical deductible. These deductibles limit the insurance companies’ exposure in these high-risk areas.

Typical homeowners insurance deductibles are a flat amount such as $500. When a loss occurs, the homeowner pays the first $500 and the insurance company pays the rest of the claim. A hurricane deductible is based on a percentage of the home’s insured value. This percentage varies from state to state and some deductibles are set by state law.

If you have a house insured for $200,000 in one of these states and a 2% hurricane deductible, you will pay the first $4000 and the insurance company pays the rest of the claim. Some insurance companies allow you to pay a higher insurance premium each year in exchange for a traditional deductible for hurricane related claims.

Washington DC, Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas, and Virginia all have hurricane deductibles.


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