Understanding Windstorm and Hail Deductibles on Home Insurance

In certain areas of North Carolina, there are high risks of windstorms, hail or named storms (hurricanes). Because of these high risks, locals’ homeowners insurance might exclude certain types of damage or contain specialized terms and conditions on it. Some of these specialized terms are called percentage deductibles. Though they work like almost any other deductible on any policy, they are calculated using a different method. Here’s how it works.

What is a Home Insurance Deductible?

The portions of your homeowners insurance that are likely to include deductibles are your dwelling insurance and your possessions coverage. The deductible is an amount of money that you agree to pay before your home insurance will begin to cover the remaining costs of your claim.

Suppose that following a house fire, your dwelling sustains $10,000 in covered damage and has a $1,000 deductible. That means your insurer will pay you $9,000 for the household repairs, but you must pay the remaining $1,000. If household damage falls below this $1,000 deductible cost, then your plan won’t pay at all, since you agreed to pay that amount yourself.

However, certain perils like windstorms, hail or named storms might have different deductible structures called percentage deductibles.

Windstorm & Hail Percentage Deductibles

Some homeowners insurance plans will automatically cover windstorms and hail damage. With others, you will have to buy this coverage separately. Usually, both options will contain deductibles that are separate from the deductibles on your standard coverage. These are percentage deductibles.

A percentage deductible means that your deductible is equal to a percentage of the total limit of your dwelling insurance. For example, if you have dwelling insurance worth $300,000 and have a 1% deductible, then your deductible is $3,000. This percentage deductible will only kick in if your home is damaged by windstorms or hail. Otherwise, a regular dollar-value deductible might still apply to a loss.

Named Storm Deductibles

A named storm deductible works much in the same way as a standard windstorm/hail percentage deductible. So, if you have a $400,000 home and a 2% named storm deductible, then you will have an $8,000 deductible.

According to the North Carolina Department of Insurance, most named storm deductibles kick in during the following period:

• Beginning at the time an advisory, watch or warning for a “named storm” is issued or declared for any part of the state of North Carolina by the National Weather Service;
• Ending 24 hours following: The termination of the last watch or warning for a “named storm” for any part of North Carolina by the National Weather Service; or the issuance of the last advisory for a “named storm” for any part of North Carolina by the National Weather Service, whichever is later.

Named storm deductibles usually apply to both your dwelling and contents insurance. Our agents are happy to work with you to make sure you appropriately integrate this coverage into your home insurance port.

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