Over the past two decades, insurance companies have become increasingly creative with regards to wind deductibles. The trend began following Hurricane Andrew in 1992. At the time, Andrew was the most destructive Hurricane in United State History as measured by the amount of damage caused. In tandem with Andrew, increases in computing power provided insurance companies with the ability to create sophisticated loss forecast models. Then, rating bureaus like A.M Best began holding insurance companies accountable for reducing property exposures along the coast in order to remain sufficient loss reserves and remain a viable company. In order to limit property exposures, insurance companies took three types of actions.
- Insurance companies retreated from coastal property exposures and non-renewed classes of business within defined proximity to the coast.
- Insurance companies limited or eliminated new property exposures within defined proximities o the coast.
- Insurance companies implemented new deductibles to shift more responsibility to insureds. (In some states, wind became excluded all together and needs to be purchased separately through state windpools)
Some companies implemented new wind or wind and hail deductibles. The deductibles are larger than the all-peril deductible and apply to any loss that was caused by wind. A simple “wind” deductible applies for any type of wind loss including a strong gust of wind that causes damage, a Nor’Easter, a tornado, a Hurricane… any kind of wind. If hail is also part of the definition then the higher deductible will also apply for any hail damage.
Other companies implemented new “named storm” or “tropical cyclone” deductibles. This type of deductible may apply to any type of loss that occurs during the time of a tropical cyclone deductible (for example, even a fire loss during this time of a hurricane). However, this type of deductible will not apply to ALL wind losses… only wind losses during a “named storm” or “tropical cyclone”. Therefore, a named storm deductible, while slightly more complicated in its application is generally preferable to a wind or wind/hail deductible.
If you currently have a wind deductible on a policy or a hurricane deductible over 1% of your dwelling amount, we recommend talking to one of our agents today to review your options.
The Choice Insurance Agency’s mission is to help you get from where you are to where you want to be financially by planning, achieving your plan and protecting your plan from unexpected events. In the process, our goal is to deliver insurance services in a manner that exceeds your expectations. See what The Choice Insurance Agency can do for you today. Give us a call at 757-416-5100 to speak with one of the licensed, professional members of our team or request a contact here. The Choice Insurance Agency. We’re on YOUR side. 757-416-5100.