September 16, 2021 7:03 pm

New York Hurricane Deductible

Are you aware that if you have Windstorm/Hurricane coverage on your homeowners policy, you may also have a separate Hurricane Deductible?
Do you know how a Hurricane Deductible impacts your claim? Do you know when it applies to a claim?

What is Hurricane Deductible? A hurricane deductible is the amount a homeowner must pay before insurance will cover the damage caused by a hurricane. Hurricane deductibles are separate from regular homeowners insurance deductibles and are based on a percentage of the home’s value. While a regular homeowners insurance policy deductible is a fixed dollar amount, like $500 or $2,000, a hurricane deductible might be 1 to 5 percent of a home’s value, or $1,000 to $5,000 for every $100,000 in home value.

From my experience, most Homeowners do not give this important topic enough attention.

 See the examples below to understand more & see where you fit in.
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$400,000 Dwelling (Coverage A)
Option A) 5% Hurricane deductible = $20,000 deductible that you are responsible for,  before your insurance company pays out 1 cent!
Option B) 2% Hurricane Deductible = $8,000
Option C) No mandatory Hurricane deductible – Standard Deductible of $1,000

Example #1: Category 1 Hurricane (74-95 mph winds) makes landfall on Long Island!

Category 1 is the lowest category, but it’s still a whopper of a storm. Very dangerous winds will produce some damage. You may have roof and siding damage. Falling debris could strike people, livestock and pets, and older mobile homes could be destroyed. Protected glass windows will generally make it through the hurricane without major damage. Frame homes, apartments and shopping centers may experience some damage, and snapped power lines could result in short-term power outages

In this hypothetical scenario, as a result of a Cat 1 hurricane, lets say you have a $5,000 roof repair + another $2,000 siding repair + $1,000 fence repair.
Total cost of damage: $8,000
If you have Option A. or B.:  The amount covered by your Insurance carrier is $0.00 (You are responsible for 100% in this scenario)
Option C.: The amount of the claim WILL be covered by your carrier, less your $1,000 deductible resulting in your carrier paying $7,000!
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Example #2: Category 2 Hurricane makes landfall on Long Island!

Category 2 hurricane: Extremely dangerous winds will cause extensive damage!
Winds range between 96 and 110 mph during a Category 2 hurricane. There is a bigger risk of injury or death to people, livestock and pets from flying debris. Older mobile homes will likely be destroyed, and debris can ruin newer mobile homes, too. Frame homes, apartment buildings and shopping centers may see major roof and siding damage, and many trees will be uprooted. Residents should expect near total power loss after a Category 2 hurricane, with outages lasting anywhere from a few days to a few weeks.

In this hypothetical scenario, as a result of a Cat 2 hurricane, lets say you have a $12,000 roof repair + another $8,000 siding repair + $3,000 fence repair.
Total cost of damage: $23,000
If you have Option A.: The amount covered by your Insurance carrier is $3,000 (You are responsible for $20k in this scenario)
If you have Option B.: The amount covered by your Insurance carrier is $15,000 (You are responsible for $8k in this scenario)
Option C.: The amount of the claim WILL be covered by your carrier, less your $1,000 deductible resulting in your carrier paying $22,000!
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Example #3: Category 3 Hurricane makes landfall on Long Island!

Category 3 hurricane: Devastating damage will occur!

In a Category 3 hurricane, winds range from 111 to 129 mph. There is a high risk of injury or death to people, livestock and pets from flying and falling debris. Nearly all older mobile homes will be destroyed, and most new ones will experience significant damage. Even well-built frame homes, apartments and industrial buildings will likely experience major damage, and the storm will uproot many trees that may block roads. Electricity and water will likely be unavailable for several days to a few weeks after the storm.

In this hypothetical scenario (Unlikely but not Impossible – 1938 Long Island Hurricane), as a result of a Cat 3 hurricane, lets say you have a $18,000 roof repair + another $12,000 siding repair + $3,000 fence repair.
Total cost of damage: $33,000
If you have Option A: The amount covered by your Insurance carrier is $13,000 (You are responsible for $20k in this scenario)
If you have Option B: The amount covered by your Insurance carrier is $25,000 (You are responsible for $8k in this scenario)
Option C.: The amount of the claim WILL be covered by your carrier, less your $1,000 deductible resulting in your carrier paying $32,000!

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