All posts filed under
Let’s start with the most important tip about deductibles: You should NEVER select a higher deductible than you can afford.
Big deductibles reduce the amount you pay for insurance. But the higher the deductible, the more you pay out of pocket when things go wrong. That means selecting a hefty deductible is only smart in a Perfect World. And, while we all wished we lived on that planet, all kinds of disasters happen – manmade and natural – to mess with it, at least temporarily.
You have two deductibles on your homeowners insurance: one is for hurricanes and the other is for everything else. The “everything else” deductible is for things like a fire, lightning strike or water damage, to name a few. It is usually a flat dollar amount, such as $1,000. The hurricane deductible is, obviously, for hurricanes – and for homes valued over $100,000, it starts at 2 percent of what the home is insured for, which is what it would cost to rebuild it. So, if the house is insured for $250,000, a 2 percent deductible would be $5,000.
In Florida, you can select up to a 10 percent deductible. And, some people decide to do that, which is fine if you have a plan to save that amount of money and keep it secured for when the wind blows.
Here is a handy factsheet on how insurance deductibles work in Florida. The Florida Office of Insurance Regulation explains when hurricane deductibles go into effect and how long they last. Regulators also require this notice on the declarations page of every homeowners policy, in boldface type of at least 18 points:
“THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE LOSSES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU.”
Now is the time to verify that the deductible amount you chose makes sense for your circumstances.
Today is Day 5 of the 2016 hurricane season, and Florida is on alert for a tropical system. It’s the third named storm of the year, and did I mention we are only 5 days into hurricane season? Pay attention please. There has never been 3 storms named this early in the season, which began June 1 and continues through November 30. Keep track of things locally, through the national Weather Prediction Center or through state weather status updates from the Division of Emergency Management.
Complacency is the biggest threat to storm preparation. Maybe you don’t scare easily. Maybe you were well prepared every year since the
Tropical Storm Erika could be a threat to South Florida come Monday – or not. No one can know for sure. That’s the way it is with weather. Florida’s Emergency Operations Center was activated, with officials acknowledging that Erika could result in anything from a rainy weekend to a category 3 hurricane.
The pre-hurricane season forecast was released today, and it “suggests” the 2015 hurricane season will be well-below average. I used the word “suggests” because the researchers themselves say this forecast is about probability; it cannot be an exact prediction because atmospheric conditions change like (um) the weather. And, armed with information about what is likely, most people will do…nothing. Too bad.
In many ranking situations, being #1 is a good thing. Except this: After nine years without a hurricane hitting Florida, our state still ranks tops for catastrophe losses. Time has not changed that. It has, however, shrunk the margin between first and second place. Granted, this is not much consolation.