Hurricane Deductibles Won’t Apply for Sandy in Del. Penn., R.I., D.C.

[Update: Maine also announced this week that hurricane deductibles would not apply for Sandy-related claims in the state. The Maine Bureau of Insurance told Insurance Journal Monday, Nov. 5, that hurricane deductibles will not apply since no hurricane warnings were posted in Maine.]

Delaware, Pennsylvania, Rhode Island and the District of Columbia have declared that hurricane deductibles won’t be applicable for Sandy-related claims in their jurisdictions. They are joining New York, New Jersey, Maryland and Connecticut that made similar announcements after Sandy slammed into the New Jersey shoreline.

Last Friday, Nov. 2, Delaware Insurance Commissioner Karen Weldin Stewart issued a bulletin announcing that Delaware homeowners will not face higher-cost hurricane deductibles resulting from the impact of Storm Sandy.

Commissioner Stewart notified the industry last Friday that based on data from the National Weather Service, Sandy did not have sustained hurricane-force winds when it made land in Delaware.

Therefore, she said, companies may not impose a hurricane deductible on Delaware claims. “We will continue to closely monitor the industry to guarantee that carriers are complying with all state insurance laws,” said Commissioner Stewart.

Meanwhile, Pennsylvania Gov. Tom Corbett announced last Thursday, Nov. 1, that Pennsylvania homeowners will not have to pay hurricane deductibles on insurance claims stemming from damage caused by Sandy.

“Insurance deductibles could have added significant costs to Pennsylvanians already struggling to clean up and rebuild after Hurricane Sandy,” said Gov. Corbett. “Insurance companies have deployed catastrophe teams to Pennsylvania and they have been advised that hurricane deductibles should not be applied to any homeowner’s insurance claims.”

Pennsylvania regulators said some homeowner’s insurance policies for properties in Pennsylvania have special “hurricane,” “tropical storm” or “named storm” deductibles based on a percentage of a property’s insured value. These deductibles typically range from one percent of a home’s insured value to five percent.

“We are very pleased with the initial, proactive response we’re seeing from insurance companies and their commitment to helping Pennsylvanians recover,” Pennsylvania Insurance Commissioner Michael Consedine said. “Insurance companies are experts in managing risk and responding to disaster. We will actively monitor the insurance industry to ensure they are fulfilling their commitments to their policyholders.”

Also last week, Rhode Island Insurance Superintendent Joseph Torti issued an industry alert, notifying insurers that based on information from the National Weather Service, a “Hurricane Warning” was not issued for the State of Rhode Island. “Therefore, pursuant to R.I. Gen. Laws § 27-76 and Insurance Regulation 110, Section 4F, insurers may not impose a hurricane deductible on Rhode Island residential claims,” Superintendent Torti stated.

Additionally, Washington, D.C., Insurance Commissioner William White informed the industry that even though the storm was initially labeled “Hurricane Sandy,” the District of Columbia did not sustain hurricane force winds associated with the storm. “Therefore, insurers may not impose a hurricane deductible on any claims submitted by District residents,” said Commissioner White.

Topics Catastrophe Carriers Natural Disasters Pennsylvania Hurricane Homeowners Maine Delaware