A relatively inexperienced attorney from another law firm asked in an open forum whether a Category 5 hurricane mandates that no hurricane deductible can be applied and if Hurricane Michael policyholders can get a return of their hurricane deductible. Corey Harris has been involved in hurricane work with our firm since 2005. He quickly replied that the deductible is going to be returned only if the Easter Bunny is bringing a present.
I then learned that a public adjuster on a multi-million dollar case called our office asking about the same thing. He claimed that a client stated that some attorney opined that the authorities did not want to classify Hurricane Michael as a Category 5 because it meant that hurricane deductibles could not be applied. We told him this is not true and to have the client’s alleged attorney call us to learn hurricane insurance law.
It is a rumor that policyholders have no hurricane deductible if the hurricane is classified as Category 5.
I wish it were otherwise. I will be back up in Panama City on Tuesday following the Easter holiday. From what I have seen, restoration is going slowly for numerous reasons. Not enough money from insurance companies is certainly one of the culprits. Building permits and construction demand is another—our local office has been slowed on its build-out. It has nothing to do with insurance, but the other problems.
Category 5 hurricanes are freaks of nature. The wind speed certainly destroys structures and causes many subtle fastening damages, even if not totally destroyed, that often go unnoticed and unclaimed.
This rumor possibly started with discussion of how deductibles get absorbed in case of a total loss or a loss where the damage exceeds the policy limits. These are very common situations in Category 5 hurricanes. Accordingly, Hurricane Michael Policyholders should read two blogs I wrote nine and ten years ago on this topic:
Subtract Deductibles From Repair or Replacement Values—Not From Policy Limits
When Calculating Insurance Payments, Take the Deductible From the Repair Value and Not the Policy Limits
Rumors and misinformation are rampant following hurricanes. If anybody would like some experienced answers, you can use the search function located at the top of our blog. Otherwise, please do not hesitate to call my cell phone at (813) 695-8733.
Happy Easter! Let’s always remember to count our blessings.
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