State Farm and Sen. Blumenthal Debate Hurricane Deductible

U.S. Sen. Richard Blumenthal (D-Conn.) recently called on State Farm to drop its hurricane deductible for Connecticut residences whose homes were damaged by Tropical Storm Irene. But State Farm shows no sign of giving in to pressure.

In an open letter to State Farm CEO Edward Rush, Blumenthal wrote, “Your company has decided — despite requests from me, insureds, and the Connecticut insurance commissioner — to keep the hurricane deductible in place even though the storm was downgraded to a tropical storm before reaching Connecticut.”

But State Farm says ignoring existing, regulator-approved insurance agreements would introduce confusion. “To ignore deductibles this one time would not be fair to customers everywhere who’ve dealt with disasters in the past and paid deductibles,” said State Farm spokesman Phil Supple. Irene was downgraded to a tropical storm before reaching Connecticut but by less than 24 hours prior to hitting the state. Current Connecticut guidelines allow carriers to impose a hurricane deductible which begins at the time a hurricane warning is declared for anywhere in the state to 24 hours after a hurricane warning is terminated, or 24 hours after the hurricane is downgraded from a hurricane.

The current hurricane deductible rule is getting another look from regulators in wake of Irene. Connecticut Insurance Department said it is working on modifying the state’s existing regulation. The new rules under consideration focus exclusively on wind speeds measured within the state. Whether a wind system was previously designated as a hurricane or whether a hurricane warning was issued will no longer be a factor if new rules are approved.

Topics Catastrophe Natural Disasters Connecticut Hurricane