What is a hurricane deductible?

A hurricane deductible is a special deductible on your homeowners insurance policy that applies specifically to damage caused by a hurricane. Unlike your standard deductible, which is usually a flat dollar amount, hurricane deductibles are typically calculated as a percentage of your dwelling coverage limit. This means the amount you owe out of pocket before insurance pays can be significantly higher than you might expect.

How it is calculated

If your policy has a 2-percent hurricane deductible and your dwelling is insured for $400,000, your hurricane deductible is $8,000. At 5 percent, the same home would carry a $20,000 hurricane deductible. The percentage applies to your Coverage A (dwelling) limit, not to the amount of the claim. So even for a relatively small hurricane claim—say $15,000 in roof damage—you would still owe the full percentage-based deductible.

When the hurricane deductible applies

The hurricane deductible is triggered when a storm is officially declared a hurricane by the National Weather Service, or when your state's insurance regulations say it applies. The exact trigger varies by state and by policy. In some states, the hurricane deductible applies from the time a hurricane watch or warning is issued until 72 hours after it expires. Outside of a declared hurricane, your regular all-other-perils deductible applies to wind damage instead.

Why hurricane deductibles exist

Insurance companies use hurricane deductibles to manage their exposure to catastrophic losses. Hurricanes generate massive, concentrated claims across large regions, and percentage-based deductibles shift a portion of that cost to policyholders. In exchange, insurers can continue to offer wind coverage in hurricane-prone areas. Policies with higher hurricane deductibles tend to carry lower annual premiums.

What Truscott recommends

Many homeowners do not realize how much their hurricane deductible could cost until they are looking at storm damage. Check your declarations page now, calculate the dollar amount of your percentage deductible, and make sure you have that amount accessible in savings. If you have questions about your hurricane deductible or want to explore whether a different percentage is available, request a Truscott policy checkup.