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Hurricane Deductibles Aren’t Just for Hurricanes

Higher deductibles usually kick in for hurricane damage, but a policy often includes tropical storms that have been downgraded from hurricane status.

MAITLAND, Fla. – Hours after Tropical Storm Nicole passed through Sharon Kidd’s neighborhood, the homeowner was surprised to hear an oak tree smash through her attic and bedroom ceiling.

“The sun was shining,” Kidd said. “The rain had stopped. We were just sitting there with no power, then the whole house shook.”

Kidd was even more surprised when her insurance company, USAA, sent her a check for the damage to her nearly 2,600-square-foot home in south Maitland, minus $12,440. The company was charging her a hurricane deductible, which with her policy meant 2% of the value of her home.

“That’s crazy,” Kidd said. “It was a tropical storm when it hit.”

But Mark Nation, an attorney with Morgan & Morgan who specializes in home insurance claims, says what USAA did was perfectly legal. He said the tropical storm designation “isn’t going to matter. It was still a hurricane.”

Virtually all homeowner’s insurance policies have a hurricane deductible, typically equivalent to some percentage of the value of the property. What many homeowners might not know is exactly when damage is considered to be caused by a hurricane.

According to Florida statute 627.4025, once a storm has been declared a hurricane by the National Weather Service, all of the destruction it causes is hurricane damage, even if it weakens. What’s more, the deductible goes into effect for any damage that happens within 72 hours of the last hurricane watch or warning issued anywhere in the state.

“If it hits the Keys and you’re in the Panhandle, you’re done.” Nation said. “It’s hurricane damage.”

Nation said he often gets people in his office complaining about the deductible being applied unfairly. “People have tried to wriggle out of this many different ways,” he said. “I have to tell them, ‘I’ve already tried all of this … Don’t get mad at me because I know the law.’”

Jeff Brandes, a former state senator from St. Petersburg who played a key role in property insurance issues while in the Legislature, said the law keeps premiums down.

The law, created in 1995, was meant to give residents incentives to take as much precaution as possible when there is a storm, Brandes said. “Do I think everyone understands that? No, but it was conceptually designed that way.”

Without it, insurance premiums would increase even more than the double-digit percentage hikes of recent years, he added.

Samantha Bequer, communications director for the Office of Insurance Regulation, confirmed the law as written and said her office encourages all homeowners to review their deductible policies carefully.

Kidd, who has lived in her home for 20 years, says she and her husband have crews working on the repairs now.

“If we had been aware at the outset how the law was worded, we would never have expected insurance to cover all of it,” she said. “We would have just been more ready to move on.”

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