As hurricane season ramps up, so do the headlines—and not all of them are helpful. Last year, there were viral stories claiming that insurance companies were “denying hurricane claims.” But here’s what most of those stories left out:
In many cases, the damage simply didn’t exceed the hurricane deductible.
That’s not a denial—it’s how the policy is designed to function. And whether you’re a homeowner or business owner, understanding your deductible—and having a plan to cover it—can make all the difference when a storm hits.
What Is a Hurricane Deductible?
A hurricane deductible is the amount you’re responsible for out-of-pocket before your insurance coverage begins to pay for hurricane-related damage.
Unlike other types of deductibles that are flat dollar amounts, hurricane deductibles are usually a percentage of your insured value—most commonly 2% to 5%, but sometimes even higher.
Real-Life Examples: What Does That Actually Mean?
For a Homeowner:
- If your home is insured for $400,000
- And your policy has a 2% hurricane deductible
- You would be responsible for the first $8,000 in hurricane damage
For a Business Owner:
- If your commercial property is insured for $1,000,000
- And your hurricane deductible is 5%
- You’re responsible for the first $50,000 in damages
This is why it’s critical to review your policy before storm season—not after.
Why the Headlines Got It Wrong
When damage from a named storm doesn’t exceed the deductible, insurance companies don’t issue a payment—and it’s often misinterpreted as a “denial.” But in reality, the claim was processed correctly.
That’s why understanding your deductible before filing a claim helps set the right expectations—and gives you time to make a plan.
How to Prepare for Your Portion of the Risk
Being insured doesn’t mean being off the hook. You still need to plan for the deductible portion of your exposure.
Here are a few smart steps:
- Emergency Savings: Build up a savings cushion designated for deductible costs
- Line of Credit: Set up a line of credit before storm season for access to emergency funds
- Review Policy Options: Ask if your policy allows for a lower deductible or “buy-down” options
- Risk Mitigation: Storm-proof your home or business to reduce potential damage
Be Proactive, Not Panicked
Hurricane season is stressful enough without last-minute surprises. Let our team walk you through your hurricane deductible, so you know exactly what to expect and how to prepare financially.
