Knowing is half the battle…Do you know the specific amount of your hurricane deductible in your insurance policy? Do you know specifically if that hurricane deductible would apply to a Super-Storm Sandy claim? A Bill recently introduced this New York Legislative Session would specifically answer both these questions. It seems to simplify the amount and applicability of hurricane deductibles to policyholders in New York. Before the last couple of years, some might have scoffed at the idea this would occupy the New York Legislature; a hurricane in New York?! But after the last couple seasons, it makes perfect sense.

Some policyholders are not even aware they may have larger than expected hurricane deductibles. Bill Number S. 1760 provides that the maximum deductible allowed in catastrophic windstorms shall not be greater than fifteen hundred dollars and shall be stated in the policy in numerical terms. The proposed bill also provides that deductibles shall only be applicable to losses occurring during windstorms with wind speeds greater than 125 miles per hour.

Specifically, the proposed addition to Section 3445 of the New York Insurance Law is as follows:

A catastrophic windstorm deductible applicable to a homeowner’s insurance policy or dwelling fire personal lines policy shall not be approved by the Department unless the deductible is applicable only to losses incurred in a hurricane which causes wind speeds of one-hundred twenty-five miles or greater per hour to occur within the State.
The maximum deductible allowed shall not be greater than fifteen hundred dollars and shall be stated on the policy in numerical terms.

Some say there is no substitute for experience. The experience of two active hurricanes affecting New York could have prompted this Bill. “The farther backward you can look, the farther forward you are likely to see.”1 We will continue to monitor this Bill and will share any updates with you.

1 Winston Churchill.