With the increase in coastal development, hurricane deductibles have been added to many homeowners’ insurance policies to help make private insurance rates more competitive. Typically, a hurricane deductible may be one to five percent of a home’s insured value. Hurricane season is well underway, and will continue through November. Now may be the time to check with your Tampa insurance agent to make sure you understand the terms of your policy in regards to your hurricane deductible.
A deductible is the amount of money you may have to pay out-of-pocket following a covered peril, before your insurance starts paying. The State of Florida has some laws governing hurricane deductibles. Items not detailed in Florida law may vary by insurer. Hurricane deductibles are triggered by certain criteria, often based on information from the National Weather Service. This is why it is important for you to clearly understand the costs you will be responsible for in the event your home is damaged or destroyed by a hurricane.
Twenty years ago, Florida was hit by Hurricane Andrew, and insurance companies paid out approximately $15.5 billion to cover insured losses. This still holds the record for the most expensive storm in history for insurers, and Hurricane Andrew is where the hurricane deductible began. When purchasing a homeowner’s policy, you may want to ask your Tampa insurance agent to explain all of your deductibles, including the one that applies to hurricanes.