Hurricane Insurance Breakdown: What You Need to Know

Hurricane insurance is a safety net for people who reside in an area with a high hurricane risk. Hurricane deductibles (an amount that you need to pay out of pocket before your policy kicks in) are based on a percentage of your home’s value.

Therefore, if in case a hurricane destroys your home, hurricane insurance will ensure that you have adequate protection to alleviate the financial burden of repairing your home.

Hurricane deductibles are calculated based on damage classified by the National Hurricane Center or National Weather Service. Without the appropriate classification, a windstorm deductible is applied to the damages. In addition, your insurance company has a trigger for utilizing the hurricane’s deductible. Generally, the trigger is invoked if the National Weather Service declares a hurricane watch.

Origin of Hurricane Insurance

After analyzing Hurricane Andrew, insurance companies saw that total losses from hurricanes could be higher than originally anticipated. The aftermath of Hurricane Katrina cost insurance companies almost $50 billion. The substantial losses caused reinsurance companies to declare that they would be unable to assume so much risk moving forward.

During the Atlantic hurricane season, every coastal state is at risk. To reduce exposure to huge losses as a result of natural disasters, insurance companies are including hurricane deductibles in home insurance policies. The percentage deductibles are influenced by the level of hurricane or windstorm. Every year, more homes are at risk of severe weather windstorm damage. Once insurance companies develop deductible plans, they are reviewed by the state insurance department to ensure that it adheres to local laws and regulations.

Hurricane Deductibles Explained

Hurricane deductibles are applicable for damages resulting solely from hurricanes. There are also windstorm deductibles that apply based on any type of wind damage. Percentage deductibles are anywhere from 2-5 percent of a home’s insured value. You will be responsible for the amount of deductible before your insurer handles the rest of the claim. In some coastal areas that are prone to severe wind damage, the deductible may be higher. Your deductible will be based on your home’s insured value and your insurer’s trigger that determines when the deductible applies.

New York Deductibles

The New York State Insurance Department outlines that the common deductibles are between 1-5 percent of the insured amount. Some insurers use category 1 hurricanes as the trigger, while others use category 2. The State Insurance Department also requires insurance companies to offer discounts to homeowners who installed hurricane-resistant storm shutters, windows, or doors on their property. The New York Property Insurance Underwriting Association offers windstorm coverage if you are unable to find it elsewhere. The Coastal Market Assistance Plan will help you find coverage if you stay in Queens, Brooklyn, Staten Island, and parts of Long Island.

Be prepared for the hurricane season with the right insurance coverage. Want another great way to protect your home? Secure reliable homeowners insurance that protects you through disasters. Call one of our trusted advisors at Abatelli Group, Inc. We are ready to get you the protection and peace of mind you need.

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