Many people think paying hurricane deductible is wrong. They believe that the purpose of homeowners insurance is to avoid personal financial losses. So why should they be paying the deductible?
Unfortunately, all private insurers in Florida have a hurricane deductible clause in their policies. There are not many ways to escape from it unless you are willing to pay a higher premium. Before we go deeper into this topic, let us understand more about hurricane deductibles.
What is a hurricane deductible?
A hurricane deductible is the portion of the claim that you have to pay (the insurance company will deduct it from your claim). It is charged as a percentage of your home’s insured value. In Florida, there are three tiers of hurricane deductible – 2 percent, 5 percent and 10 percent.
So if the value of your home is $300,000 and the hurricane deductive is 2 percent, it comes to $6000. It means, if a hurricane strikes your home, you will have to pay the $6000 for repairs from your own pocket and the remaining will be reimbursed by the insurance company. It may sound unfair, but it helps insurance companies offer more competitive rates, but then, if more than one hurricane strikes your home during a year, you have to pay the deductible only once.
Unfortunately, you cannot do away with the deductible; you can either reduce it or increase it. However, a WhenSafe Credit insurance policy from Frontline Insurance offers you another option. In return for a small fee (which will be added to your annual premium), Frontline will shave off a percentage from your hurricane deductible.
What is the benefit to me from this policy?
Frontline will reduce your hurricane deductible by 5 percent (that is, you will have to pay 5 percent less in case a hurricane hits your home in the first year of the policy). In the second year, the company will reduce your hurricane deductible by 20 percent. In the third year, it will be reduced by 40 percent and up to 60 percent in the fourth year. In the fifth year, it will be reduced by 80 percent.
The real magic begins in the sixth year. If a hurricane hits your home in the sixth year, you don’t have to pay any deductible. Sounds good, doesn’t it?
Considering the fact that Florida has not been hit by a major hurricane in over 9 years, it still makes sense to opt for this option in your policy. To learn more, please contact Anderson and Associates.
