Now that hurricane season is upon us, do you know what your storm deductible is? Your storm deductible is the amount of money you will need to contribute FIRST to repair damage to your covered property caused by a storm as defined by your policy. And it may NOT be the same as the main deductible on your homeowners insurance applying to other property losses.
It is becoming more and more common for insurance companies writing homeowners-type of policies to have separate, often times higher deductibles for damage caused by hurricanes, tropical storms, cyclones, wind &/or hail and likely other names similar in meaning. This is especially true in hurricane-prone areas (like the east coast) and depending on the carrier and/or agent, this may not be made abundantly clear to you. This change in deductible could happen at renewal and notification of such could be stuffed inside of all of the other paperwork you receive at that time. You really have to look at your policy and/or talk to your agent.
A very common type of storm deductible is known as a percentage deductible. These deductibles typically range from ½ % to as much as 5 % of the dwelling amount. To give you an example of how this works, let’s say your home is insured for $300,000 and you have a 2% storm deductible. A tropical storm (not necessarily even a hurricane) takes place and blows off some of your roof shingles and/or siding. The contractor tells you it’s going to cost $20,000 to repair the damage. The math breaks out as follows: 2% of $300,000 is $6,000. $20,000 loss – $6,000 deductible = $14,000 covered by insurance. And this is assuming you have replacement cost coverage on your roof or siding and no deduction is further taken for depreciation. So even though your main property deductible may have only been $500., this particular loss really cost you $5,500 more.
Fortunately, there is good news for those who do not like the sound of a storm deductible or a percentage deductible. Not all carriers insist upon them and you likely have choices in deciding your storm deductible. Our agency represents some carriers that are not insistent upon these special deductibles. We would be more than happy to review your policy with you so your storm deductible never comes to you as a surprise.