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Pay Attention to the Hurricane Deductible


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2019 Jan 21, 12:10pm   896 views  2 comments

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It’s worth discussing something that will affect several of our customers over the next few weeks; hurricane deductibles. For today’s discussion, I’ll be using a carrier’s proprietary Hurricane Percentage Deductible form.

It’s important to pay attention to form titles. This is a hurricane percentage deductible. It is not a windstorm or hail percentage deductible. ISO has published a Windstorm or Hail Percentage Deductible endorsement (CP 03 21). There are important differences between the forms. What’s the difference? I’ll quote the ISO CP 03 21 to start.

The Windstorm or Hail Deductible, as shown in the Schedule and set forth in this endorsement, applies to covered loss or damage caused directly or indirectly by Windstorm or Hail. This Deductible applies to each occurrence of Windstorm or Hail.

That endorsement establishes a deductible that applies to the peril of windstorm or hail. Now, let’s look at our Hurricane Percentage Deductible endorsement.

The Hurricane Deductible, as shown in the Schedule and set forth in this endorsement, applies to covered loss or damage caused directly or indirectly by each occurrence of hurricane.

Did you notice the significant difference? The Windstorm or Hail Percentage Deductible applies to any loss or damage by any loss by and windstorm or hail. The Hurricane Percentage Deductible applies only to loss or damage by hurricane. That’s a big difference. By applying the percentage deductible to the peril of windstorm or hail, you have the potential for more restrictive coverage than the hurricane percentage deductible.

Windstorm or hail aren’t defined in the policy. They are terms that have been established over time. Hurricane is another thing entirely. Since it is an insurance form, we will have to define what a hurricane is since we are making a clear difference between windstorm and hail and hurricane.

Under the terms of this endorsement, a hurricane is a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service. The duration of the hurricane includes the time period in “your state”:

1.Beginning at the time a hurricane watch or hurricane warning is issued for any part of “your state” by the National Hurricane Center of the National Weather Service;

2.Continuing for the time period during which the hurricane conditions exist anywhere in “your state”; and

3.Ending 72 hours following the termination of the last hurricane watch or hurricane warning issued for any part of “your state” by the National Hurricane Center of the National Weather Service.

As used in this endorsement:

“Your state” means the state in which the scheduled premises are located.

That definition is important because as soon as the NHC issues watches or warnings in ANY PART of the state, the hurricane percentage deductible applies for any loss that might be attributed to the hurricane. As I’m writing this on Tuesday afternoon, there are hurricane watches posted from southern South Carolina to southern Virginia. You can be sure that the insurers writing hurricane coverage in those areas are already working to calculate hurricane deductibles.

It’s also important to note that this is a hurricane deductible. I know that we already established that, but it can’t be mentioned too much because it’s not a tropical storm deductible or named storm deductible. It applies to the hurricane event. You should also pay attention to the details of the definition of a hurricane because Hurricane Florence is forecast to be downgraded soon after making landfall. Even when it is renamed Tropical Storm Florence, the hurricane deductible may still apply.

The hurricane (according to the policy) is still a hurricane as long as any hurricane watch or warning exists in the state and for 72 hours after the last watch or warning expires. That means that even though it was barely a tropical storm when it impacted your customer, that hurricane deductible will apply. That could be a serious difference in deductible as we will see in more detail soon.

That’s not the only part of the endorsement that you need to be looking at. There’s another item that you must check. How does the hurricane deductible apply? Let’s look back at our Hurricane Percentage Deductible endorsement.

More: https://www.insurancejournal.com/blogs/academy-journal/2018/09/12/500759.htm

#Insurance #Hurricane #Deductibles

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1   Tenpoundbass   2019 Jan 21, 1:03pm  

This is why I started doubling up on my Mortgage Principal every month back in 2015. I'll be paid off early next year.
The insurance industry can kiss my ass. I have a 35K roof replacement from the Huricane in September 2017, that is still not finished. Between the insurance company trying to low ball me, then my Roofing company said my whole roof had to be replaced. My insurance company fought it for about 8 months. Then said OK. The Bank sent me a checklist I had to fill out with my financial and the roofers. Then the Bank sent me a check filled out to me and the Roofer. I gave it all to the roofer. My City then dragged their feet for permits for 3 to 4 mouths. Now we're waiting on the Tile. Now in the meantime my once might substrate under my main tile roof has been exposed to constant leaks and downpours. With nothing but tarps and then one layer of substrate.

Had my house been paid off, and I was responsible for my own $35K roof. I would have just put a $50K roof on it within weeks after the storm.
The insurance conjob has become the biggest cluster fuck it could be.

One thing I've noticed. For about 5 years in a row, the insurance company kept sending over Alcoholics and Druggie derelicts to reinspect my house(none of them had any contractor's credentials, I asked) then the insurance company kept using that information to raise my premiums. After the bank must have told them "What in the fuck did you tell them, they keep sending in $3500 on a $1400 Mortgage payment?"

I'm down to $48K now.
2   HeadSet   2019 Jan 21, 3:09pm  

This is why I started doubling up on my Mortgage Principal every month back in 2015. I'll be paid off early next year.

Totally agree. Nothing beats a paid for home. But even after paid off, I would still keep insurance, but with a better insurance company. Myself, and every I know that has used USAA has not had no issues. USAA was prompt for my roof damage, car hail damage, and even a new kitchen floor when the dishwasher leaked.

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