by Kim E. Wells
For those of you who have suffered through Tropical Storm Fay and its terrible effects, there is finally some good news.
Because Tropical Storm Fay never reached hurricane strength and was not categorized as a hurricane under the laws of the State of Florida, Florida's Insurance Commissioner, Kevin McCarty, issued an advisory to remind Florida consumers and insurance companies that the hurricane deductible of their homeowners insurance policy does not apply.
While those portions of your home or business that were damaged by flood must still be covered by flood insurance, for those of you who suffered windstorm damage, the significant deductible related to hurricanes is not applicable, and insurance companies may only apply the deductible that is unrelated to hurricane damages usually referred to in policies as "all other perils deductible" or "other than hurricane deductible."
The hurricane deductible only applies when property damage results from a named hurricane. The Office of Insurance Regulation created a link to provide consumers with information about hurricane deductibles on its website, www.floir.com, in the center section of the home page.
Check Your Deductible Amount
Homeowner’s policies are made up of many coverages; however, policy deductibles are usually expressed in two parts: hurricane coverage and coverage for all other perils. Florida Statute §627.701 states that insurers must offer the following hurricane deductibles: $500.00, 2%, 5% and 10%. Percentages are of the total value of the home (normally Coverage A or dwelling coverage) and, as such, a 10% hurricane deductible on a home insured for $200,000.00 would be $20,000.00. Other peril deductibles, or non-hurricane deductibles, are generally lower, such as $500.00, $1,000.00 or 1% of the value of the home.
The only time wind damage to a home is considered hurricane damage, therefore making the hurricane deductible apply, is if the wind damage occurred during a hurricane named by the National Hurricane Center of the National Weather Service.
Florida Statute §627.4025 provides that the duration of a hurricane includes the time period in Florida beginning at the time a hurricane watch or hurricane warning is issued for any part of Florida by the National Hurricane Center of the National Weather Service, continuing for the time period during which the hurricane conditions exist anywhere in Florida, and ending 72 hours following the termination of the last hurricane watch or hurricane warning issued for any part of Florida by the National Hurricane Center of the National Weather Service. Wind damage caused by any other circumstance is deemed non-hurricane damage, and the all other perils or non-hurricane deductible applies.
The Importance of Flood Insurance
Many of our friends and neighbors have severe flood damage as a result of Tropical Storm Fay. Unfortunately, flood damage is typically not covered by standard homeowner’s policies. Flood insurance is purchased through the National Flood Insurance Program (NFIP). If you do not have this type of coverage, and you need it, consumers may usually purchase this coverage for future storms with the help of their agent or by contacting the NFIP directly. There is usually a thirty day waiting period before flood insurance takes effect. While it is too late to purchase this coverage for damage from Tropical Storm Fay, it is something that many of us overlook and is very important to protecting what is usually our most important asset.
The Office of Insurance Regulation has created a special section on its website with information regarding flood insurance and links to the Federal Emergency Management Agency (FEMA) and the NFIP.
As always, if you have a question about your insurance coverage or any other questions regarding your rights under an insurance policy, please contact one of the attorneys from the insurance department at Pilka & Wells.