Most homeowners with an insurance policy are aware that they have to meet their deductible before the insurance company will cover any damage. However, few are aware that insurance policies include a separate provision for hurricanes. What does this mean for those affected by Hurricane Sandy?
How homeowners insurance deductibles work
Most homeowner insurance policies come with a standard deductible of $500 to $1,000. This means that if there’s damage to your property or theft, you will have to pay $500 to $1,000 out of pocket before you are reimbursed by your insurance company for the loss.
What if the damage is from a hurricane?
Ahh, this is where it can get a bit more complicated and costly. The standard homeowners insurance typically does not cover hurricane damages as that is treated as a separate deductible. As you might expect, the deductibles are much higher for hurricane insurance than they are for a standard homeowners insurance policy. In fact, hurricane insurance deductibles can be as high as 5% of the insured value of the property, if not higher. For instance, if you’ve insured your home up to $500,000, the hurricane deductible is $25,000 or 25 to 50 times greater than a standard deductible. It’s important to note that 18 states allow insurers to include a hurricane deductible in their policy. These states include New York, New Jersey & Connecticuit, which are among the hardest hit by Hurricane Sandy.
Are there any ways to avoid hurricane deductibles?
It depends on the specific hurricane force winds. In New York state, Governor Andrew M. Cuomo recently issued an order stating that insurance companies could not enforce the hurricane deductible because Hurricane Sandy did not have hurricane force winds when the storm made landfall in New York.
More Questions? Browse answers or ask insurance deductible questions online.
Related Articles
->Are Insurance Proceeds From Hurricane Sandy Taxable?
->Getting Your Hurricane Sandy Insurance Claims Paid Quickly
->Is Your Homeowners Insurance Policy Providing Adequate Coverage
->Why You May Need Umbrella Liability Insurance to Protect Your Assets
->The Tax Impact for a Natural Disaster
->Does It Make Sense To Get Renters Insurance?
->Is a Flood Insurance Settlement Taxable?
