States like Florida are very susceptible to hurricanes and other types of storms, making it important for homeowners to have hurricane insurance to protect their homes and personal belongings against damages.
However, in areas that have high hurricane risk, homeowners insurance policies often have hurricane deductibles for hurricane-related damage. Understanding how hurricane deductibles work will help you better understand what your financial obligations are if your home is damaged by a hurricane.
Here’s everything you need to know about hurricane deductibles, including how they work and how to calculate them.
What Is Hurricane Insurance?
Hurricane insurance is a part of your homeowners insurance policy that protects your home against hurricanes and tropical storms. In coastal Florida cities like Miami, Kendall, Pembroke Pines, and Weston, hurricane insurance is particularly important as your home is more likely to be damaged by one of these natural disasters.
If a hurricane damages your home or personal belongings, your homeowners insurance policy can help pay to repair these damages up to your coverage limits.
What Is a Hurricane Insurance Deductible?
In hurricane-prone areas, homeowners insurance policies often have separate deductibles for hurricane-related damage. These deductibles are typically higher than your standard homeowner insurance deductible and can either be a flat fee or based on a percentage of your home’s total value.
When Hurricane Deductibles Apply
Whether or not you have to pay a hurricane deductible depends on what constitutes a ‘trigger’ event according to your insurance company. A trigger event is an event that invokes your hurricane deductible.
In most cases, you’ll have to pay a hurricane deductible if your home is damaged by storms categorized as hurricanes by the National Hurricane Center or National Weather Service. You may also have to pay a windstorm deductible if your home is damaged by any type of windstorm that is not classified as a hurricane.
If your home is damaged by any other covered hazard, then you’ll have to pay your ‘All Other Perils’ (AOP) deductible.
Homeowners should carefully review the section of their policy that discusses hurricane damage to ensure they understand when they might be obligated to pay a hurricane deductible.
What States Have Hurricane Deductibles?
Not all states in the US have hurricane deductibles. In most cases, only areas that are particularly susceptible to hurricanes and windstorms have these deductibles.
This includes:
● Alabama
● Connecticut
● Delaware
● Florida
● Georgia
● Hawaii
● Louisiana
● Maine
● Maryland
● Massachusetts
● Mississippi
● New Jersey
● New York
● North Carolina
● Pennsylvania
● Rhode Island
● South Carolina
● Texas
● Virginia
● Washington, D.C.
The Insurance Information Institute maintains a current list of hurricane deductible laws in each state.
How Do Hurricane Deductibles Work?
Hurricane deductibles work in the same way that any other deductible works.
When your home is damaged by a hurricane or another trigger event, you must pay your deductible before your insurance covers any damages. After paying your deductible, your homeowners insurance policy will pay for the remaining damages up to your coverage limit.
How to Calculate Your Hurricane Insurance Deductible
In Florida, all insurance companies are required to offer hurricane deductible options equal to a $500 flat fee, 2%, 5%, or 10% of your home’s total value for homes worth up to $250,000.
For homes worth more than $250,000, insurance providers are only required to offer hurricane deductibles that are equal to 2%, 5%, or 10% of your home’s insured value. This means that, in most cases, your hurricane deductible will be equal to a percentage of your home’s value.
For example, if your home’s insured value is $500,000, and your hurricane deductible is 2%, then you would have to pay $10,000 before your insurance pays for any hurricane-related damages.
While these are the deductible options that insurers are required to provide under Florida law, they can offer more options in addition to these. Depending on your insurer, you may be able to choose a flat-rate deductible, even if your home is worth more than $250,000.
Request a Homeowners Insurance Quote
Homeowners insurance policies do cover hurricane damage, but depending on where you live, you may have to pay a separate hurricane deductible before your insurance pays for any damages. Understanding how hurricane deductibles work will help you better understand what costs you may be responsible for if a hurricane damages your home and personal belongings.
At FIB Insurance, we work with homeowners in Miami, Kendall, Pembroke Pines, Miramar, Weston, Davie, and other Florida cities to help them find affordable homeowners insurance policies that protect them from a wide range of common hazards.
Contact FIB Insurance today to get a free custom quote and learn more about homeowners insurance in Miami, FL.