- Hurricane deductibles. In hurricane prone states, special deductibles may apply for homeowners insurance claims when the cause of damage is attributable to a hurricane. Whether a hurricane deductible applies to a claim depends on the specific “trigger” selected by the insurance company. These triggers vary by state and insurer and usually apply when the National Weather Service (NWS) officially names a tropical storm, declares a hurricane watch or warning, or defines a hurricane’s intensity in terms of wind speed. Hurricane deductibles are generally higher than other homeowners policy deductibles and usually take the form of a percentage of the policy limits. In some states, policyholders have the option of paying a higher premium in return for a traditional dollar deductible; however, in high-risk coastal areas insurers may make the percentage deductible mandatory.
- Wind/hail deductibles work in a similar way to hurricane deductibles and are most common in places that typically experience severe windstorms and hail. These include Midwestern states (like Ohio) and around Tornado Alley (which goes through Texas, Oklahoma, Kansas and Nebraska). Wind/hail deductibles are most commonly paid in percentages, typically from one to 5 percent.
- Flood insurance offers a range of deductibles. If you have—or are considering buying—flood insurance, make sure you understand your deductible. Flood insurance deductibles vary by state and insurance company, and are available in dollar amounts or percentages. Furthermore, you can choose one deductible for your home's structure and another for its contents (note that your mortgage company may require that your flood insurance deductible be under a certain amount, to help ensure you'll be able to pay it).
- Earthquake insurance has percentage deductibles that are anywhere from 2 percent to 20 percent of the replacement value of your home, depending on location. Insurers in states that have higher than average risk of earthquakes (for example, Washington, Nevada and Utah), often set minimum deductibles at around 10 percent. In California, the basic California Earthquake Authority (CEA) policy includes a deductible that is 15 percent of the replacement cost of the main home structure and starting at 10 percent for additional coverages (such as on a garage or other outbuildings).
Wind/hail and hurricanes are covered by standard homeowners insurance; flood and earthquake policies are purchased separately by homeowners. But each of these disasters has their own deductible rules. If you're in an area that's high risk for one of these natural disasters, understand how much of a deductible you'll need to pay if a catastrophe strikes. Start here, check your policies and speak to your insurance professional to learn exactly how your particular deductibles work.
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