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The Ins and Outs of Hurricane Insurance Deductibles

Learn how you can prepare for destructive weather with our guide to hurricane insurance deductibles.

hurricane insurance

You can’t predict the weather. Despite even the most accurate forecasts, it’s hard to pinpoint the damage total that can result from a hurricane or severe storm.

If you don’t have the right insurance, it can be hard to recover after a hurricane hits. Here are some of the most important things to know about  hurricane insurance deductibles.

Where did hurricane insurance deductibles originate?

Ever since Hurricane Andrew in 1992, South Florida has taken things seriously regarding this particular weather phenomena. As a result of the hurricane, insurers were left with $15.5 billion in losses. At the time, this was the most costly hurricane in U.S. history.

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The need for hurricane insurance was a necessity. As of right now, 19 states (including the District of Columbia) put in place a separate, percentage-based deductible for hurricane-related damage, in addition to the standard homeowners deductible. It became important for these deductibles to be included in order to save money because of the high-risk of major property losses. Insurers realized they have to cover some of these costs, and not just let them fall solely on their insured homeowners.

How do insurance deductibles work for a hurricane?

When a hurricane damages your home, you’ll be responsible for around 1-5% of the insured value before your coverage kicks in. The exact percentage will be noted on your homeowner policy.  Sometimes, the out-of-pocket cost can be a lot higher than the deductibles you pay for things like fire, damage or theft.  Let’s say you have your home insured for $400,000 and there’s a 5% hurricane deductible. In this situation, you’d be responsible for the first $20,000 in damages. A standard deductible (non-hurricane) might have you pay $1,000 out of pocket for your home insurance.

Depending on the state or insurance carrier, some homeowners can get a dollar-amount hurricane deductible by paying a higher premium. However, the percentage deductibles in high-risk shore areas are unavoidable. You should check with your insurance company and see what’s covered in these situations.

hurricane insurance

The triggers needed for hurricane insurance coverage to kick in

There are a few things necessary for hurricane insurance to apply to the situation. These triggers vary by state and the insurance, but a good indicator comes from the National Weather Service.

When the news comes out and they issue a hurricane watch or warning, it’s all about the intensity or level of the hurricane that matters. The actual moment that a Category 1 hurricane has hit the land is when you should worry about the deductible, according to Jeanne Salvatore, spokeswoman of the Insurance Information Institute.

How well do you understand your hurricane deductible?

According to a study from the Insurance Research Council (IRC), 34% of homeowners in New Jersey, North Carolina, South Carolina, Texas and Florida have never heard of hurricane deductibles. Most of them were unsure of what this detailed. It was found that over 25% lacked the knowledge of what goes into understanding basic deductibles.

Furthermore, 33% of respondents with hurricane insurance were unsure of the percentage applied to their deductibles. This lack of understanding makes it harder to gain coverage in the aftermath of a hurricane-related event.

Know your insurance company

Each state has its own policy in regards to hurricane insurance. Talk to your insurance agent to run through all of the technicalities to make sure you can get coverage.

In the case of something as recent as Hurricane Harvey, the Texas Wind Insurance Association received over 42,000 claims from policyholders. The majority of residential policies have 1-2% hurricane deductibles.

These numbers haven’t changed too much during the past few decades, because very few major hurricanes have hit in this timeframe. It’s a bit worse in the Caribbean, because a lot of homes aren’t insured (despite being the most vulnerable).

Do you live in an area prone to this kind of weather activity? Are you prepared with hurricane insurance? Drop a note below.

AAA provides homeowners insurance and much more. Go to AAA.com/Insurance to talk to an agent today.  


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