Florida laws are very specific regarding when the Hurricane Deductible applies, for what duration of time, and how many can be applied in a calendar year.
When does a Hurricane Deductible apply:
- Hurricane deductibles apply for 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.
How many times can a Hurricane Deductible be applied:
- The hurricane deductible applies only once during a hurricane season.
How much is a Hurricane Deductible:
- All insurers must offer a hurricane deductible of $500, 2 percent, 5 percent and 10 percent of the policy dwelling or structure limits. The percentages are based on the total value of the home.
What is the definition of a Hurricane for insurance purposes?
A hurricane is defined in s. 627.4025(2)(c), Florida Statutes, as a storm system that has been declared a “hurricane” by the National Hurricane Center of the National Weather Service.
What is the definition of Hurricane Coverage?
“Hurricane coverage” is coverage for loss or damage caused by a windstorm during a hurricane. The term includes damage to the interior of a building or to property inside a building, caused by rain, snow, sleet, hail, sand, or dust if the direct force of the windstorm first damages the building, causing an opening through which rain, snow, sleet, hail, sand or dust enters and causes damage anywhere in the state of Florida. This is also found in s. 627.4025, Florida Statutes.
When does the Hurricane Deductible apply?
According to s. 627.4025, Florida Statutes, the Hurricane Deductible applies only in the event of a named hurricane. The duration of a hurricane in which the Hurricane Deductible would apply includes the time period:
1) Beginning at the time a hurricane watch or warning is issued for any part of Florida by the National Hurricane Center. Remember, it must be a “hurricane” declared by the National Hurricane Center; and
2) Ending 72 hours following the termination of the last hurricane watch or hurricane warning issued for any part of Florida by the National Hurricane Center.
What are the Hurricane Deductible options?
All insurance companies must offer Hurricane Deductible options of $500, 2 percent, 5 percent, or 10 percent of the policy dwelling or structure limits unless the specific percentage deductible is less than $500. The Hurricane Deductible must be listed as a dollar amount, even if the deductible is listed as a percentage amount.
There are a few exceptions to the Hurricane Deductible amounts that must be offered. The exceptions are:
1) Dwellings insured for at least $100,000 through $249,999: an insurance company may offer a policy that guarantees that the company will not non-renew the policy in order to reduce the hurricane exposure for one 12-month renewal period. However, the policy may include up to a 2 percent Hurricane Deductible.
2) Dwellings with insured limits of $250,000 or more: The insurance company does not have to offer the option of a $500 Hurricane Deductible.
3) Any Dwelling with insured limits of less than $500,000: The policy may not have a Hurricane Deductible in excess of 10 percent unless:
a) The policyholder personally writes and provides to the insurance company the following statement in his or her own handwriting, signs their name, and is signed by all other named policyholders on the policy and dated: “I do not want the insurance on my home to pay for the first (specify dollar value) of damage from hurricanes. I will pay those costs. My insurance will not.” (Per Section 627.712(2)(a)1, Florida Statutes)
b) If the insured structure has a mortgage or lien, the policyholder must provide the insurance company with a written statement from the mortgagee indicating the mortgagee approves the policyholder electing to have the specified deductible.
This is allowed by, and subject to, regulations outlined in s. 627.701(d)1(a) and (b), Florida Statutes.