Some Homeowners Unexpectedly Hit With ‘Windstorm Deductible’

November 7, 2012

  • November 7, 2012 at 1:17 pm
    Tired of it all says:
    Well-loved. Like or Dislike:
    Thumb up 46
    Thumb down 1

    And this broker is a licensed professional. Sad how many folks sell the product without a clue as to what they are selling. Sounds like there may be a little E&O exposure for this individual.

    • November 7, 2012 at 1:35 pm
      TxLady says:
      Well-loved. Like or Dislike:
      Thumb up 22
      Thumb down 0

      So true Tired of it all, for some it is what can I do to get the price down and sell this, then in the end the insured pays with a loss. I am amazed this broker is confused on this. Seems pretty clear, opt for the windstorm ded and you pay the windstorm ded when the loss is from wind.

      • November 7, 2012 at 1:43 pm
        NYbroker says:
        Well-loved. Like or Dislike:
        Thumb up 24
        Thumb down 0

        This is the reason brokers need to stop getting into bidding wars with those who pay little attention to the actual policy wording. I spend hours reading policy forms and questioning how coverage will apply before I even release a proposal to my client. More brokers need to spend time analyzing the product they are selling. How many people out there do not have replacement cost on their personal property, or have an ACV clause for a roof that is over 10 years old, or, for some businesses, a 72 hour waiting period for Business Interruption?

        • November 7, 2012 at 5:05 pm
          TxLady says:
          Well-loved. Like or Dislike:
          Thumb up 10
          Thumb down 0

          NYBroker, some like you, are Insurance Professionals who provide a valuable service to their clients, and others are just salespeople looking for a buck. I’d be happy to have you as my agent any day.

    • November 8, 2012 at 3:28 pm
      exclaimsguy says:
      Like or Dislike:
      Thumb up 2
      Thumb down 0

      “Licensed”, yes….”Professional”, unlikely. I live in a state wherein we have wind and hail deductibles. If the damage is caused by a summer breeze it applies! Typically can be bought down but at a relatively high price. Pretty amazing how little is known by so many.

  • November 7, 2012 at 1:34 pm
    Cheetoh Mulligan says:
    Well-loved. Like or Dislike:
    Thumb up 33
    Thumb down 0

    Let the Games begin!
    Is it covered under Flood? Is it a hurricane deductible or windstorm deductible, or is it E&O?
    ANd the winner is: the Lawyers.

  • November 7, 2012 at 1:40 pm
    Is it or isn't it says:
    Poorly-rated. Like or Dislike:
    Thumb up 7
    Thumb down 22

    Hidden due to low comment rating. Click here to see.

    • November 7, 2012 at 5:06 pm
      DougJ says:
      Like or Dislike:
      Thumb up 10
      Thumb down 2

      What would be the definition of defination??

    • November 7, 2012 at 5:11 pm
      NYbroker1 says:
      Well-loved. Like or Dislike:
      Thumb up 15
      Thumb down 0

      Correct – a windstorm deductible needs to be defined. It is called the endorsement that is attached to the policy. Brokers should read these endorsements prior to binding and propose to the insured all the facts. Chances are if a wind deductible is being applied to a property policy, the insured premises is in a wind prone area and the broker SHOULD KNOW THAT about their clients risk.

      You are incorrect – The hurricane deductible was not waived. It simply did not apply because the storm was not a hurricane as defined by the endorsement.

      Hurricane deductibles are subject to regulatory approval by the state. Each state has a different set of standards on what can trigger the deductible. The states applied the various factors and the hurricane definition did not meet the standards for this Storm. I don’t see the confusion here?

      It simply amazes me when brokers are “surprised” by these items after a loss has already happened. People – this is why we exist!!!! First and foremost, we are professional advisors charged with accessing the risk of our clients and providing risk transfer products to them. That is our job.

      If we can not provide that simple service of knowing what coverages we are providing to our clients, lets just close down the insurance brokerage industry. Insurance Carriers can sell directly to the insurance buying public and the insureds can figure it out for themselves if they are covered properly.

  • November 7, 2012 at 2:22 pm
    Karen Frasier says:
    Like or Dislike:
    Thumb up 1
    Thumb down 0

    I wonder what specifically makes it a hurricane in insurance terms? I’m in Kentucky so obviously we don’t have a lot of hurricanes. But a few years ago when Hurricane Ike sent his major winds up through our area the claims were paid as wind.

    • November 7, 2012 at 3:10 pm
      Drew says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      We typically have three deductibles near the coast. All peril, wind and tropicial cyclone or hurrricane. 1% wind and 2% hurricane/tropical cyclone or the most common minimum deductibles in the area.

  • November 7, 2012 at 2:24 pm
    youngin' says:
    Well-loved. Like or Dislike:
    Thumb up 17
    Thumb down 0

    I am relieved to find out that I am not the only one appalled by this broker’s story. No wonder he wished to remain anonymous.

  • November 7, 2012 at 2:44 pm
    Is it or isn't it says:
    Well-loved. Like or Dislike:
    Thumb up 10
    Thumb down 0

    It seems to me the real area of concern should be that many policyholders are going to face as much as 5% deductible exclusion from SANDY while officials are issuing statements saying a policyholder could save thousands of dollars in out-of-pocket costs.

    • November 7, 2012 at 5:48 pm
      Bill says:
      Well-loved. Like or Dislike:
      Thumb up 12
      Thumb down 0

      Very true. The other misconception when policyholders hear talk about the hurricane deductible not applying, they think that there will not be ANY deductible!

  • November 7, 2012 at 3:02 pm
    Sympathy for the Devil? says:
    Like or Dislike:
    Thumb up 9
    Thumb down 0

    A hurricane deductible applies if, and only if, the property is damaged by a covered peril caused by a storm with hurricane force winds. The cumulative departments of insurance informed insurance carriers they can’t apply the hurricane deductible because the storm had downgraded from a hurricane (though this is up for semantic debate).

    Most carriers have mandatory wind/hail deductibles, or windstorm, or named storm, deductibles for houses within X-miles of the coast. It comes with the territory. Also, Katrina gave plenty of national exposure to the issue of wind and flooding as relates to the HO4 vs. NFIP policies.

    Customers choose a level of coverage and purchase a policy. If they chose the 5% wind deductible, then they took advantage of the carrier’s lower pricing for the risk and are essentially gambling that their homes will never be impacted by wind or hail. Bad gamble, of course, but for folks with extra cash in the bank it’s a safer bet. Alternatively, some folks choose to pay the higher premium and select something less than 5%.

    I don’t feel a lot of sympathy for the brokers who were selling policies and not doing full and fair disclosure for their customers. Part of the blame goes to the consumer too, for not reading the policy.

    I do feel a lot of sympathy for the agents who did due dilligence, had the conversations, and their customer’s memories are suddenly short now that the $10,000 claim isn’t being paid.

  • November 7, 2012 at 6:31 pm
    adam rust says:
    Like or Dislike:
    Thumb up 7
    Thumb down 0

    That is a load of bs there are two different things many insurers have a *hurricane deductible* and a windstorm deductible the windstorm deductible is usually always lower than the hurricane deductible. policy holders should still have to pay their windstorm deductible to get things fixed and they should have an agent that does not make deductibles so high they cannot afford to pay them. what would be the purpose of insurance if you cannot afford the deductible. the reason many people have deductibles is because they want the price cheap and they fall for the high deductibles. it is not a good idea and consumers should pay attention.

  • November 8, 2012 at 8:16 am
    CB says:
    Well-loved. Like or Dislike:
    Thumb up 16
    Thumb down 1

    This reminds me of all the stories I heard about high school grads who joined the military to get their education paid for and never expected to have to be in combat. Then 9/11 came and they were deployed.

    I know they are different situations, but the expectation was similar — I’ll sign up for this (windstorm deductible / Military service) to get what I want (a lower premium/ paid college education) because I don’t think I’ll ever have to pay up (pay the deductible / go to war).

  • November 8, 2012 at 8:26 am
    Stephen says:
    Like or Dislike:
    Thumb up 2
    Thumb down 0

    In Florida, the hurricane deductible is in effect from the moment a hurricane watch or hurricane warning is issued anywhere in the state of Florida and lasts until the hurricane watch or hurricane warning is lifted.

    • November 8, 2012 at 4:11 pm
      susan says:
      Like or Dislike:
      Thumb up 2
      Thumb down 0

      Stephen, it actually ends 72 hours AFTER the termination of the last hurricane watch or warning issued for any part of FL by the National Hurricane Center.

      • November 9, 2012 at 8:14 am
        Hillsborough agent says:
        Like or Dislike:
        Thumb up 2
        Thumb down 0

        ask one of your carrier reps when the hurricane deductible kicks in and watch them squirm. I’ve never been able to get a straight answer out of them. They don’t always go by the 72 hour rule and most don’t seem to know. Specifically ask them if the storm came ashore as a hurricane but was quickly downgraded to a tropical storm before the damage to insured’s property occurred.

  • November 8, 2012 at 8:51 am
    NYbroker1 says:
    Well-loved. Like or Dislike:
    Thumb up 19
    Thumb down 0

    When this broker called the insurance department hotline, he should have turned his license in too.

    • November 9, 2012 at 12:39 pm
      Ins Guy says:
      Like or Dislike:
      Thumb up 5
      Thumb down 0

      No, actually they should have traced the call and TAKEN IT from him.

  • November 9, 2012 at 3:47 pm
    Tired of it all says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    All this stress about hurricane deductibles is exactly why the majority of E&S markets go with a direct wind/haild deductible and avoid the entire subject of hurricane or not. I always feel some level of sympathy for the folks in the admitted market who have to deal with the DOI and having to file forms and pricing.

  • November 12, 2012 at 10:32 am
    Confused Homeowner says:
    Like or Dislike:
    Thumb up 1
    Thumb down 0

    Can someone give me the “windstorm deductible” guidelines??

  • November 12, 2012 at 11:20 am
    NY insuranceman says:
    Like or Dislike:
    Thumb up 1
    Thumb down 0

    Sympathy has it right regarding coverage & how these deductibles apply. However, in many cases the insurance companies do not let the customer pick & choose the deductible. Their underwriting guidelines require the higher Hurricane & Wind deductible in certain areas/counties/states. It is up to us agents to make sure our clients know what they are getting so they won’t be surprised.

  • January 4, 2013 at 5:36 pm
    jmiller says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    So my question is: on my home owners policy there is no mention of hurricane just a deductible of 2% for WIND/HAIL does that deductible apply to Sandy ?

  • February 20, 2013 at 7:33 pm
    FL Insurance Man says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Do you want the broadest coverage or the cheapest price? To Jmiller – yes 2% wind/hail means you have a 2% of your limits deductible for wind/hail claims. $300,000 limits = $6k ded. How to get the coverage that you need requires risk exposure analysis. Your agent needs to tell you that: 1. The standard ISO and AAIS coverage forms only pay ACV on personal property and RCV on real property.

    2. So you need to get REPLACEMENT COST COVERAGE on your personal property OR you will only get Actual Cash Value paid on your lost or damaged property.

    3. What is Scheduled Personal Property coverage? Also referred to as personal inland marine coverage. A deductible does Not apply in these types of losses.

    4. Homeowners Policies do NOT cover flood loss.

    5. NFIP Flood Coverages does NOT cover personal property stored in your basement!

    6. What is a Diffence In Conditions policy?
    7. What does “absorbing my deductible mean”?
    8. What are special limits of liability for certain types of personal property coverages and in what circumstances do they apply?

    9. Does your agent understand the coverage he/she sold to you?
    10. Does the adjuster handling your claim understand the coverage that you have?

    11. Has the (your) insurance company decided to roll the dice and see if they can get away with SCREWING YOU out of coverage? An insurance company in Texas, thought the could get away with exactly that and it cost them $10 million USD.

    12. What is insurance agent and adjusters E&O coverage?



Add a Comment

Your email address will not be published. Required fields are marked *

*

More News
More News Features