Irene Raises Hurricane Deductible Questions in Hard-Hit Northeast States

By | September 7, 2011

  • September 7, 2011 at 1:40 pm
    insurance mom says:
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    I’m not familiar with hurricane coverage – don’t need it in our part of the country. If you have “hurricane coverage” does that mean your coverage includes storm surge flooding in addition to windstorm? Surface water flooding too?

    • September 8, 2011 at 2:24 pm
      WindBlows says:
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      Absolutely not. That’s where the NFIP (up to $500,000) will kick in first then, excess flood coverage kicks in (if placed). “Flooding” and wind driven rain are specifically excluded in the property policy. That’s why as an agent, I always sell property, wind and flood coverage. If the client rejects any of them, I get their signature and lock it up in Fort Knox.

  • September 7, 2011 at 1:52 pm
    GL GURU says:
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    It all comes down to what the policy says. Plain and simple. If it is vague well then we all know that the tie goes to the runner (insured)

  • September 7, 2011 at 1:58 pm
    Joseph Pulvirenti says:
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    This article is not correct as to the representation that “[i]n Connecticut, hurricane deductibles are permitted only on coastal properties.” The State of Connecticut Filing Review Guidelines Related to Underwriting Coastal Homeowners Insurance Policies dated November 9, 2009 allows the use of such deductibles also on non-coastal properties (over 2600 feet of the coast) in Connecticut, as noted here:

    http://www.ct.gov/cid/lib/cid/2009underwritingcoastalguideline.pdf

  • September 7, 2011 at 2:06 pm
    WindBlows says:
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    There may be more to look at here… There is a difference between a hurricane deductible, named storm deductible, wind deductible, all other wind deductible and an all other peril (AOP) deductible. I hope most agents know what they were doing when placing these policies. If not, get your E&O policy paid up quickly…

  • September 7, 2011 at 2:06 pm
    ST says:
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    Many companies in Alabama have a “Named Storm” deductible in lieu of a hurricane deductible.

  • September 7, 2011 at 3:19 pm
    Doug F says:
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    Most companies in the Mid-Atlantic that write coastal properties apply a Windstorm deductible. It does not matter if the storm was a Hurricane, Tropical Storm, or just a Windstorm. If the policy says “hurricane” deductible, that carrier probably needs to ante up.

  • September 7, 2011 at 4:47 pm
    Hillsborough agent says:
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    It’s amazing that this is still a question. The policy language on this should be very clear. Although, try asking a rep from a carrier when the hurricane deductible kicks in and watch them squirm. Most don’t know.

    One told me it’s up to the adjuster. So the adjuster has to determine if the wind was 74mph or greater when the damage was done? Or the adjuster has to determine what time the damage was done – i.e. the storm was downgraded at 11:00 and the damage occurred at 10:59? how ridiculous is that?

    Seems like a pretty good idea to get this figured out.

  • September 7, 2011 at 5:22 pm
    KJ says:
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    I am dealing with this nightmare of “Tropical Cyclone” deductible right now.

    In Pennsylvania they are enforcing these deductibles. When comparing Max and sustained wind speeds from national weather service Connecticut and New Jersey both experienced faster winds.

    So why is it the Insurance companies are waiving deductibles in these States that experienced more sever weather?

    Also the verbiage “Tropical Cyclone Deductible” is misleading. Especially when definitions are vague or not even in policy.

    Any Feedback or advice would be greatly appreciated.

    • September 8, 2011 at 11:13 am
      DD says:
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      KJ – any issues that you have should be directed to the Pennsylvania Insurance Administration. Any language that is contained in your insurance policy has been read and approved by this group and they will handle all complaints or problems.

    • September 9, 2011 at 8:35 am
      Hillsborough agent says:
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      If your deductible specifically states ‘Tropical Cyclone,’ then the percentage deductible would apply. Hurricanes, Tropical Storms and even Tropical Depressions are Tropical Cyclones.

      Tropical Cyclone is actually one of the more definitive terms they could use. It’s a low pressure system that originates in the tropics and has a closed, low-level circulation.

  • September 8, 2011 at 11:05 am
    Rod says:
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    How was this storm NOT downgraded earlier?
    Recorded wind data does not support the Hurricane Warning.
    Insurance Deductibles should not be in play. No one disputes the winds failed to live up to the hype.

    North Carolina

    Tropical-storm-force winds began to affect the Outer Banks hours before landfall, producing waves of 6–9 ft (1.8–2.7 m).[180] In addition to the gales, Irene spawned several tornadoes early on August 27, while approaching the coast.[181][182] No regular weather station or buoy, however, measured sustained hurricane-force winds from the storm, with the highest winds officially recorded at 67 mph (107 km/h) by a buoy near Cape Lookout.[183] Precipitation totals from Irene in the region were particularly high, ranging between 10–14 inches (250–360 mm); Bunyan recorded a peak amount of approximately 14 inches (360 mm).[32]

  • September 8, 2011 at 1:40 pm
    Al Cochran says:
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    As someone in Florida this is not a new subject. It is also one that a small change to the policy makes a very big difference. It will all depend on how the policy is worded as it relates to “Named Storms”. The storm was still named Irene when it hit the northeast. If your policy is not specific to hurricanes then a tropical storm may also be considered as a named storm. That being the case you would then be responsible for the igher deductible usually a percentage of your values.

    • September 9, 2011 at 11:18 am
      Rod says:
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      It seems in Connecticut, for many policies, the trigger is “hurricane warning” status. If the Hurricane Warning is lifted greater than 24 hours before the damage occurs, the higher hurricane deductible does not apply.

      With the revised Saffir-Simpson scale relying on surface wind speeds (no longer barometric pressure too as barometric pressure was difficult to justify scientifically), it appears there was no justification for NOAA / NHC to keep the warning in effect as long as it did. I don’t think anyone with credibility seriously disputes the storm was hyped to the max for a lot of reasons (e.g. storm related consumer spending, political public safety spectacles, television ratings, etc.). The data showed wind speeds produced by the storm were relatively weak (not rising to the level to warrant the hurricane warning that remained all the way to landfall in the Northeast).

      Connecticut’s Governor, Attorney General, Insurance Commissioner, Consumer Protection Division Head, raised the issue that the data did not support the hype and the failure of NHC to timely lift the hurricane warning — as well as some legal and Public Relations arguments to encourage insurance companies not to rely on a hurricane status as a way to impose a higher deductible. The storm thankfully produced wind speeds that failed live up to the hype. Very damaging for many, but no where near a hurricane. I suspect it is precisely why so many insurance companies in Connecticut are “waiving” the hurricane deductible.

  • September 12, 2011 at 1:41 pm
    JW says:
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    I live in the state of MD, Prince Georges Cty and I have Allstate homeowners insurance. After Irene blew out of town, I filed a claim for roof damages resulting from a tree falling on my house. I was initially informed by Allstate the extremely high hurricane deductible would apply. To say I was extremely upset, would be an understatement. I did not know that this deductible existed on my policy but apparently it was added a couple of years ago.

    Anyway, I had a happy ending since yesterday I was informed by the insurance adjuster that in the state of MD only certain counties were under a hurricane warning when Irene blew through and since Prince Georges County was not one of the countie under the hurricane warning, the hurricane deductible ($6,000) would not apply; only the standard $500 deductible. Wheww! I am so relieved.

    Note to self: ALWAYS read information upon receipt of renewed policy. Never assume that nothing has changed.

  • September 12, 2011 at 2:26 pm
    Rusty says:
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    All of the foregoing comments point up the fact that what we need in our industry is standardization of storm deductibles just like there are standard definitions of other perils. The current situation with varying definitions of what kind of storms are subject to a higher deductible, when it is triggered and how much it is is reprehensible. Is it fair, for example, for people living next door to each other and having different insurers, each with different storm standards, that provide coverage for one but not the other because of those differing definitions, deductibles and triggers? Unlike standard property deductibles, wind and hurricane deductibles and their related percentages and triggers are not voluntarily chosen by the policyholder, but mandated by their insurer. Since widespread storm damage does not discriminate, something should be done to standardize storm criteria.



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