Do you know if a deductible applies to your commercial hurricane coverage? Attorney Bill Voss strongly encourages you to check out the policies you carry for your business if you’re not sure. Businesses located in hurricane-prone regions, such as those along the Gulf of Mexico or the Atlantic Coast, are increasingly finding that new deductibles apply to their coverage for hurricane damages under certain circumstances, and the out-of-pocket costs can be very high. Don’t let a hurricane deductible come as an unhappy surprise in the event of a major storm—take the time today to review your current commercial insurance policies and understand your responsibilities as a policyholder.
Will a Deductible Apply to Your Business’ Hurricane Insurance Claim?
Hurricane deductibles are becoming common across certain regions of the U.S., and the laws for hurricane deductibles vary from state to state. These deductibles are often higher than the deductibles that might apply to other types of damage under your commercial policy, and they will apply to all the property damage caused by what your state and insurance company define as a “hurricane.” The Insurance Information Institute shows that hurricane deductibles currently may apply for policyholders in the following states:
- Alabama
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Louisiana
- Maine
- Maryland
- Massachusetts
- Mississippi
- New Jersey
- New York
- North Carolina
- Pennsylvania
- Rhode Island
- South Carolina
- Texas
- Virginia
- Washington, D.C.
Keep in mind that hurricane deductibles will often only apply when a particular storm meets certain conditions. For example, hurricane deductibles in your area might only trigger when…
- A hurricane watch or warning is issued.
- A hurricane has been named by the National Weather Service.
- A certain hurricane intensity or wind speed is reached.
Hurricane deductibles will begin to apply to any damage caused after the “trigger” event. They will usually continue to apply to any damage caused in the days immediately after a hurricane ends, or even as long as there are hurricane conditions anywhere in the state where your business is located.
How Much of a Deductible Should Businesses Expect on Hurricane Insurance Claims?
The absolute best way to understand the amount of your hurricane deductible is to read through the most current insurance policies that cover your business. However, if a hurricane deductible applies, you can generally expect to see it calculated either as a flat dollar amount or a certain percentage of your coverage. Depending on the hurricane policy that covers your business, the deductible may only apply once per annual hurricane season.
What Kinds of Problems Come Up With Hurricane Deductibles?
Keep in mind that your commercial hurricane insurance probably does not cover losses caused by storm surge and rising waters, which are usually instead handled through the National Flood Insurance Program (NFIP). Unfortunately, the damage from flooding can be significant, and it often makes up a very large portion of typical “hurricane” losses. If you’re already reviewing your commercial hurricane coverage, it may also be a good time to review the flood coverage for your business.
Some businesses can also struggle with “gray areas” in coverage or deductible application, especially if their coverage includes separate deductibles for wind and hail losses. This can lead to situations where it isn’t clear how business losses of a certain type, or that happen during a certain time period, are covered—or even when coverage should kick in.
Sometimes, businesses have no trouble settling their hurricane insurance claims, even when confusing deductibles apply or damaged properties span several different states. However, it is still common for challenges to come up for commercial policyholders after a destructive storm. If you are concerned about a commercial hurricane insurance claim, don’t hesitate to reach out for additional help. There are many benefits to working with an attorney after a commercial insurance claim denial, and getting legal guidance from the start of the claims process can go a long way toward protecting your business’ recovery.
For help negotiating large-scale hurricane losses, overcoming deductible challenges, or fighting unfairly denied insurance claims, reach out to the experienced attorneys with the Voss Law Firm today at 1-888-614-7730. You may also find it helpful to read through our free book, Commercial Insurance Claims: The Basics, which will help you understand what to expect from the claims process and how to get started on the right foot.
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