Hurricane Season Isn't Over: Are You Prepared for Your Insurance Deductible?
Hurricane season is still underway, and while many Floridians prepare by stocking up on supplies and protecting their homes, there is another important step that can be easy to overlook: checking your homeowners' insurance deductible.
Knowing how much you may have to pay out of pocket after a hurricane can help you avoid an unexpected financial surprise.
Your Regular Deductible vs. Your Hurricane Deductible
A homeowner's policy typically has a regular deductible, often called an All-Other Perils (AOP) deductible; that applies to many covered losses.
A hurricane deductible is separate and applies when a covered loss falls within the policy definition of hurricane coverage.
Unlike an AOP deductible, which is often shown as a dollar amount, hurricane deductibles are commonly based on a percentage of your home dwelling coverage (Coverage A).
For example:
If your home has $400,000 in Coverage A and your policy has a 2% hurricane deductible, your hurricane deductible would be $8,000.
That means you could be responsible for $8,000 covered hurricane damage before your insurance coverage begins paying, subject to the terms and limits of your policy.
The hurricane deductible options available to you may vary depending on your insurance carrier, policy, and dwelling coverage amount.
When Does the Hurricane Deductible Apply?
Under Florida law, the hurricane period begins when the National Hurricane Center issues a hurricane warning for any part of Florida.
It ends 72 hours after the last hurricane watch or hurricane warning for any part of Florida has been terminated.
If your home experiences covered hurricane damage during this period, your hurricane deductible may apply.
Florida's Calendar-Year Hurricane Deductible
For personal residential property policies in Florida, hurricane deductibles generally apply on a calendar-year basis.
If you experience covered losses from more than one hurricane during the same calendar year, amounts already applied toward your hurricane deductible can matter when determining the deductible for a later hurricane claim. Depending on the circumstances, another deductible amount may still apply.
This is why it is important to keep documentation of hurricane-related losses and speak with your insurance carrier or agent about how your specific policy works.
Are You Prepared?
Before the next storm threatens Florida, take a few minutes to look at your homeowner's policy and ask yourself:
- How much would that deductible be in actual dollars?
- Could I comfortably cover that amount after a storm?
- Is my current dwelling coverage sufficient to cover the estimated cost of rebuilding my home?
- Do I understand what my policy covers and excludes?
- Do I have separate flood coverage if I need it?
Remember, standard homeowners' insurance generally does not cover flood damage, so hurricane and flood protection should be considered separately.
Understanding Your Coverage Before the Storm
Insurance can be confusing, especially when different deductibles and types of coverage apply to different situations. The best time to understand your policy is before you need to file a claim.
If you have questions about your hurricane deductible or homeowners' coverage, Strohm Insurance Agency is here to help you understand what your policy says and what it means for you.
Stay safe this hurricane season,
The Team at Strohm Insurance Agency
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