Florida Hurricane Deductibles
Hurricane deductibles are percentage or dollar deductibles that are higher than for other causes of loss. They are calculated as a percentage of the dollar amount of coverage on the dwelling or as a flat dollar amount like a standard deductible. By Florida statute, the application of hurricane deductibles is triggered by windstorm losses resulting only from a hurricane declared by National Weather Service. Hurricane deductibles apply for damage that occurs from the time a hurricane watch or warning is issued for any part of Florida, up to 72 hours after such a watch or warning ends and anytime hurricane conditions exist throughout the state.
Hurricane deductibles and their triggers are set by law and are the same for the private, or regular market, as well as Florida’s Citizens Property Insurance Corporation (CPIC), the state-run program which provides property insurance to consumers. The hurricane deductible applies only once during a hurricane season. All insurers must offer a hurricane deductible of $500, 2 percent, 5 percent and 10 percent of the policy dwelling or structure limits. The percentages are based on the total value of the home (e.g., a 10 percent hurricane deductible on a $200,000 home would be $20,000). In some cases a deductible of more than 10 percent is permissible. For example, for homes that are insured for less than $500,000, the deductible can be higher than 10 percent if the homeowner states the dollar value of the deductible in a letter to the insurer. The deductible must be stated in the policy as a dollar amount regardless of the percentage.
By Florida law, property insurance rate filings must include mitigation discounts or credits. These are applied to property insurance premiums. These discounts are available for personal and commercial residential property only.
The CPIC (Citizens), Florida's state-run insurer of last resort will insure new homeowners in high-risk areas and others who cannot find coverage in the open private market. Under Florida law, Citizens may write a new insurance policy only if no comparable private market coverage is available or comparable private market policy premiums are more than 15 percent higher than a comparable Citizens policy. Homeowners who receive a private market offer with a premium within 15 percent of a comparable Citizens policy may not be insured by Citizens.
CPIC offers personal, residential, multiperil or wind-only policies, commercial residential multiperil or wind-only policies, and commercial nonresidential multiperil or wind-only policies.
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