Following a hurricane or other storm that has caused devastation to homes and businesses, many owners seek answers with their insurance policy. There is a significant threat for homeowners during the peak season of hurricanes (June 1st to November 30th), meaning that homeowners are already in the face of that danger. The threat is them having to pay money in order to repair the damage that has been done to their property despite them having had purchase insurance for the wind that comes from the hurricane. The reason for that issue is that most property insurance policies contain what is called a “deductible”, what would be known as “hurricane deductible percentage” in this case. These changes were made after the devastating hurricane that took place in 1992, hurricane Andrew. Property hurricane insurance policies were changed dramatically as a result.
The losses and damages that one is faced with after a hurricane is not news, but due to various factors like the building boom, the growth in Florida’s population, and the destruction that took place due to hurricane Andrew, insurance companies changed their game; it was no longer “business as usual” for Florida’s property insurance, hence, resulting in the creation of “hurricane deductible”, more commonly known as wind deductible. The insurance companies did not want to lose; they wanted to put a cap to the amount a homeowner could recover after a hurricane, especially in the state of Florida where hurricanes present themselves like mosquito’s with still water. Learning the specific details involved with hurricane deductibles is vital for anyone who has purchased this add-on, and for those in storm-prone states.
How Do Hurricane Deductibles Apply and Who Controls Them?
The Florida Statute 627.701(5)(a) describes the following who has control over the application of these deductibles in Florida:
The following indications will persist during the time period of May 1, 2005, or after for any insurance policy of a property hurricane deductible that has been renewed or issued:
- The same insurer that has one or more policies shall have the hurricane deductible apply to losses on an annual basis for all covered hurricane damages.
- During the calendar time frame, if there were damages of other hurricanes or damages prior to a hurricane, any subsequent hurricane damage can have a deductible applied to it, that should be more than the amount that is applied to the coverage for hurricane deductible or for damages other than for hurricanes. For subsequent claims made for hurricane damage, the insurance company might tell their insurer to hold any receipts and documentation that they have in conjunction with any losses that have to report or that are less than the hurricane deductible amount that they currently have.
This statute is crucial for any person holding these types of deductibles, which is why every policyholder should review this information with a public adjuster in Miami at Churchill. The details of this statute need to be addressed and made clear to each insured individual because we don’t want a homeowner to have a wake-up call because they did not understand the full scope of the deductibles that they currently had.
Now, when do deductibles apply?
There are specific elements that must exist in order for a hurricane percentage deductible to apply verses that of the standard deductible that covers home insurers for damages and perils that come from water damage, fire damage, or wind damage. What are these requirements? Many individuals are not aware of them and should become knowledgeable of such:
- This Florida statute explicitly clarifies that The National Hurricane Center is the sole basis on whether a deductible applies or it does not
- If a hurricane watch or warning has been made by the National Hurricane Center of a threat of a hurricane, any claim made for up to 72 hours after that warning will have the deductibles applied. Also, if there were obvious signs of hurricane conditions, then they will also apply.
The Actual application occurs when?
These deductibles actual application is based on the property policy insured value percentage amount. To better understand this concept, this following example is provided:
This example applies to commercial policies as well, but if a homeowner has an insurance value of $250,000 on their home and chooses to have a hurricane deductible of 5%, then the homeowner would have to pay a deductible of $12,500, only if there hasn’t been any limitations or exclusions that will interfere with the insurance company paying for their losses. IN that case, the homeowner would have to pay any exclusion or limitation out-of-pocket before the insurance company starts to repair their home. One thing that must be made clear is that if the National Hurricane Center did not declare a wind storm that caused wind damage to a property, a standard deductible would most likely apply, which is significantly less.
The literature of insurances states that either $500, 2%, 5%, or 10% must be offered as a hurricane deductible for all insurers. The higher the percentage, the premium cost will be lower. A con of having this would be having a very high cash payout amount if someone has a lower premium for hurricanes. If one chooses to do that, they must be sure that they are able to absorb that type of payment amount. The hurricane percentage deductible within each policy should be checked for its accuracy because it must be boldface type; no less than 18 points. This issue needs to be discussed with a practiced public adjuster because it is a subject of extreme relevance, especially when a hurricane warning or watch has been issued.
FAQS on Hurricane Deductibles
Question: Following a hurricane claim, how can I be assisted by a licensed public adjuster?
Answer: The services that insurance companies provide after any disaster are limited. In addition, adjusters are often rotated in and out from the danger zone by the insurance companies, which means that an insurer will have to speak with them over and over again. Public adjusters facilitate the process by the usage of their expertise and skilled documentation qualities during the loss adjustment phase. We allow our clients to focus on restoring their damaged property because we take hold of the burden of having to move the claim to the insurance company.
Question: How do I acquire the best representation from a licensed public adjuster?
Answer: It is important that the selected public adjuster has a depth of resources to manage your claim. Researching on them beforehand and figuring out whether they are best suited for your needs is vital. The term “best” is uniquely applied to every case.
Question: Will there be an undervaluation of my settlement amount by the insurance company?
Answer: It most certainly will. That is the job of insurance companies; to stripe you from what you deserve because that is how they will profit.
Question: Is the entire loss of damages coming from a hurricane covered through my insurance?
Answer: This depends entirely on the type of coverage you have and the deductible amount applied to you. Usually, the physical assets will be covered like your building and equipment. Also, additional living expenses may be covered following a hurricane, but the amount provided for all this covered age is dependent upon the policy that you have.
Question: If I lose income as a result of roads being blocked to my commercial building because of the hurricane aftermath, will I be compensated for the loss of revenue?
Answer: Again, it depends on this policy, but most policies will cover for losses of business as a result of civil authority, and even for egress and ingress interferences. Checking the details of how long a road needs to be blocked before coverage is offered and how long that coverage will be offered for should be noted.
Question: Will I be covered if deliveries of my suppliers cannot be made?
Answer: Unless your policy has dependent properties coverage, it will not be. Typically, the supplier must be named in the coverage. Many factors are involved with this coverage. Contact a qualified public adjuster to learn more.
Question: How are my perishables protected by Spoilage Endorsement and what is it?
Answer: Spoilage coverage is what is provided for perishables that can become bad as a result of power outages, which storms are known to cause. For example, foods, meats, prescription drugs that must be kept cold, etc. These are common losses experienced, especially if the policyholder does not have a generator.
Question: What is my windstorm property deductibles policy limit percentage?
Answer: The loss that comes from a hurricane making landfall that blows a roof or other structural damage is categorized as a windstorm. Unlike other deductibles like broke pipes, the damage that comes from windstorm typically equals a percentage of the current policy limit. An additional premium could be purchased to opt-out in having to pay for a deductible.
Question: What is Debris removal expense?
Answer: After a windstorm, there is often a lot of debris that must be removed, which is expenses often incurred known as debris removal. Some policy languages allow for coverage of this expense above the limit of the policy for either 5%, 10%, or 25%. The wording of this coverage may be ambiguous, or it may be clear, which could be a factor when claiming for this coverage. For this reason, before needing a specific coverage, as a policyholder, you should be certain of what coverage you have.
Question: How can Extra expense cover help me and what does it cover?
Answer: The expenses made after a loss that go above and beyond the normal expenses you do is what is covered through extra expense insurance. The purpose of this is for any interruption that comes to a business is quickly mitigated. Businesses might have to cover extreme expenses following a windstorm in order to get back into operation, and the extra expense will cover that.
We Are Knowledgeable with Hurricane Deductibles
Our experienced Miami public adjusters know the ins-and-outs of every detail involved with an insurance policy for hurricanes. We know what is covered, when it is covered, and what to do to acquire that coverage. Anyone living in hurricane-prone states must revise their policies to ensure that they are receiving adequate coverage in their policies. The losses that a business owner or homeowner could suffer from the aftermath of a hurricane could be detrimental, for that reason, deductibles and policy legal jargon’s must be comprehended. A public adjuster could provide that knowledge to their clients and help them attain the best possible results after a loss has been claimed.
It is essential to understand that an insurance company will never see in your best interest, but we always do!