What Is a Hurricane Deductible and How Does It Work?

For millions of homeowners in the United States, hurricanes are constant concerns and potentially costly catastrophes. Insurance can be a valuable resource when accounting for various natural disasters and weather-related events, but hurricanes may fall outside the scope of standard coverage. Fortunately, you can still be prepared for these events by augmenting your insurance appropriately and understanding various nuances, including a hurricane deductible.

Understanding Named Storm Deductibles

You may already be familiar with the concept of a deductible; it establishes a minimum amount you must contribute toward covered losses. After meeting your deductible, your insurance carrier may issue aid for remaining covered losses up to your policy’s limits.

However, you may need to account for somewhat different functionality when dealing with a hurricane deductible. Also known as a named storm deductible, these clauses may apply when the National Weather Service declares a hurricane or a named tropical storm.

For losses arising from these weather events, you may need to meet a different deductible than that which exists within your insurance for other covered perils, such as fires and vandalism. Additionally, named storm deductibles are often calculated as a percentage of your home’s total rebuild cost, rather than a flat amount.

For example, if your home is calculated to potentially cost $500,000 to fully rebuild and you have a 5% hurricane deductible, you’d be responsible for supplying the first $25,000 in the event of a total loss. Alternatively, if your named storm deductible was 2%, you’d have to pay $10,000 out of pocket.

What Else Do I Need to Know?

In addition to navigating hurricane deductibles’ generally higher out-of-pocket costs, you should also be sure that you’re covered in the first place. Flood-related damage is typically excluded from standard home insurance policies. Additionally, while Florida home insurance companies are required to offer windstorm coverage, you should still verify these details of your policy before a storm hits.

We’re Here to Help

Contact Iron Rock Insurance today to discuss your hurricane deductibles and confirm that you and your home are properly insured against these disasters.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.