insurance

What to Know About Hurricane Deductibles

The amount you'll have to pay out-of-pocket for hurricane damage is different from your standard homeowners policy deductible.

Editor's note: This column was updated November 1 to reflect an announcement made by the New York governor's office regarding hurricane deductibles.

Homeowners affected by Hurricane Sandy might be on the hook for more out-of-pocket costs than they expected. That's because their hurricane deductibles are likely higher than their standard homeowners insurance policy deductibles.

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A standard homeowners policy deductible is usually $500 or $1,000, according to the Insurance Information Institute. However, hurricane deductibles are 1% to 5% of the insured value of the home. They can be even higher in some coastal areas with high wind risk, according to I.I.I. So a homeowner whose house is insured for, say, $200,000 with a 5% deductible, would have to pay $10,000 out of pocket before insurance kicked in to cover the cost of repairs.

Eighteen states and the District of Columbia allow insurers to include hurricane deductibles in their policies. The states are Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas and Virginia. If you live in one of these states, check the declarations page of your policy for details about your hurricane deductible. Whether it applies to a claim depends on a specific trigger selected by the insurance company, according to I.I.I. The triggers can vary by state and insurer.

New York Governor Andrew M. Cuomo announced November 1 that homeowners in the state will not have to pay hurricane deductibles for damage caused by Sandy. The New York State Department of Financial Services told insurers that deductibles should not be triggered because Sandy did not have sustained hurricane-force winds when it made landfall in New York. The department also will be sending its mobile command center to hard hit areas to help people with insurance questions and problems.

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