Issues with hurricane deductibles

Many if not most homeowners and commercial property owners who have purchased insurance to protect their property may have what is called a deductible. To summarize, a deductible is a certain amount of money, say $1,000, that the owner agrees to chip in should he or she need to file an insurance claim.

So, if a person with a $1,000 deductible files a property insurance claim ultimately worth $10,000, the insurance company will pay $9,000, the value of the claim less the deductible. Even though it may require them to chip in to pay a part of their own damages, owners often prefer deductibles because they result in lower premiums.

Those who live in the coastal regions of Texas and Louisiana need to be aware of so-called special hurricane deductibles. Insurance companies in both states are allowed to use these deductibles in their policies.

Usually, these deductibles are much higher than the deductible the customer selected for other types of property damage claims. By way of example, some deductibles may be a percentage value of the property, say, 2 percent. For a $200,000 home, this means a person's deductible for hurricane-related damage is $4,000, even though the deductible for other claims would be $1,000.

A person's property insurance policy should spell out the terms and conditions of any hurricane deductible, including at what point the deductible will apply and how the deductible will be figured. Moreover, these sorts of deductibles must comply with the laws and regulations of the state.

Particularly with respect to commercial property, condominiums, and the like, a lot of money can be at stake depending on whether a hurricane deductible applies. A person who is trying to handle a hurricane property damage insurance claim may wish to speak to an attorney experienced handling these sorts of matters.

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