We’re currently in the middle of hurricane season and all Florida property owners should be examining their insurance policies to review both their policy limits and hurricane deductible before disaster strikes.

Below are answers to some frequently asked questions concerning the hurricane deductible in Florida:

1. When does the hurricane deductible apply?

By Florida statute, the application of hurricane deductibles is triggered by windstorm losses resulting only from a hurricane declared by the National Weather Service.

Hurricane deductibles apply to damage that occurs from the time a hurricane watch or warning is issued for any part of Florida, up to 72 hours after such a watch or warning ends and anytime hurricane conditions exist throughout the state.

2. What is the difference between the hurricane deductible and all other perils deductible?

Hurricane deductibles are commonly percentage deductibles that are higher than deductibles applied to other covered causes of loss.

3. What does the hurricane deductible percentage mean?

The percentage hurricane deductible is often calculated as a percentage of the dollar amount limit of liability on the Coverage A dwelling/building.

Example: If your Coverage A dwelling/building limit of liability is $200,000, then a 2% hurricane deductible would be $4,000; a 5% hurricane deductible would be $10,000.

The property owner is responsible for the deductible amount before the insurance company pays for covered damages. The deductible amount is generally subtracted from the claim payment prior to the issuance of the check.

4. Can I lower the hurricane deductible?

All insurers in Florida must offer a hurricane deductible of $500, 2%, 5% and 10% of the policy dwelling/building limit of liability. A lower hurricane deductible might result in a higher annual premium (see my personal experience below).

5. If there are multiple hurricanes that damage my property in one hurricane season, can my insurance company apply the hurricane deductible multiple times?

No, the hurricane deductible applies only once during a hurricane season.

Examining your hurricane deductible now before your home or business is damaged could save you thousands. Last year I noticed that my homeowner’s insurance policy contained a 5% hurricane deductible, and I reached out to my insurance agent to determine what the increase in premium would be to lower the hurricane deductible to a 2% or 3% deductible. Surprisingly, the premium increase to lower the 5% hurricane deductible to 2% was less than $50 a year! Definitely worthwhile compared to the thousands saved if my home suffers a hurricane loss.

I spoke with too many homeowners after Hurricane Irma that had hurricane deductibles in excess of $20,000 and were unable to afford repairs to their homes. Be prudent and discuss your hurricane deductible with your insurance agent now.

*Additional information concerning Florida’s hurricane deductible is available at https://www.myfloridacfo.com/Division/Consumers/FloridasHurricaneDeductible.htm

  • David Thompson, CPCU

    These are good points for consumers to remember. It’s a common misconception by some that the percentage deductible is a percentage of the loss, not a percentage of the coverage amount.

    Also, under Florida Statute 627.701 there are exceptions when an insurer is not required to offer a $500 hurricane deductible. In addition, the same statute states that the deductible may be changed (up or down) only at the policy renewal date.

    Finally, the statute applies only to “admitted” insurers so surplus lines insurers are not required to comply with this statute.

    • Ashley Harris

      Great additional information David. Thank you!

  • HodgePhillips

    Interesting article and comments.
    Here is another question: What is your input on placing funds for deductible in Reserve Account?