What Is a Hurricane Deductible? (2024)

What Is a Hurricane Deductible?

Hurricane deductibles are a special out-of-pocket charge that applies to homeowners insurance claims for hurricane damage. They’re typically based on a percentage of the home’s value. You need to pay this amount upfront before the insurance covers any damages. What counts as a hurricane and when this deductible applies varies among states and insurers.

Key Takeaways

A hurricane deductible is a separate deductible listed in a homeowners policy that applies to hurricane damage claims.
Hurricane deductibles are usually listed as a percentage of the home’s dwelling coverage limit, such as 2%.
Hurricane deductibles are only required in 19 states—Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, and Virginia—plus the District of Columbia.
If your policy has a hurricane deductible, ensure you have enough in savings to cover the high out-of-pocket cost. You must pay the deductible before the insurance kicks in.

Why the Hurricane Deductible Exists

When Hurricane Andrew hit South Florida in 1992, it caused an estimated $25 billion in damage. Afterward, some insurers introduced hurricane deductibles. This shifted more financial risk onto homeowners while helping to avoid premium increases. Then Hurricane Katrina hit in 2005, causing more than $43 billion in insurance claims.

After these disasters, reinsurers—the backup insurance companies that primary insurers use to ensure claims always get paid—required homeowners insurance companies in hurricane-prone states to reduce their losses. Hurricane deductibles become widespread in these states.

How the Deductible Works

The hurricane insurance deductible is the amount of money you must pay toward a hurricane-related loss before your insurance company starts to pay. This replaces your regular deductible and is laid out in the policy. Currently, homeowners in 19 states and the District of Columbia must pay hurricane deductibles instead of their regular deductibles when making a hurricane damage claim.

In some states, homeowners may pay lower insurance premiums if they make improvements to their home to minimize damage from a hurricane, such as installing storm shutters or hurricane-resistant laminated glass windows, doors, and shingles.

Windstorm Deductible vs. Named Storm Deductible vs. Hurricane Deductible

Windstorm, named storm, and hurricane deductibles all have to do with how much you’ll pay in deductibles for wind-related damages. Which deductible applies to your claim depends on the parameters outlined in your policy. See “When the Deductible Applies” below for more information.

Windstorm or wind/hail deductible: Applies to any damage from wind or hail, such as a tree branch falling and damaging your home’s roof after a windy day. This is true unless your policy designates that a named storm or hurricane deductible is applicable.
Named storm deductible: Applies to damage from weather events categorized by the National Weather Service (NWS) or U.S. National Hurricane Center (NHC) as hurricanes, typhoons, tropical storms, and tropical cyclones. The weather event must also have been given a name, such as Hurricane Andrew or Superstorm Sandy.
Hurricane deductible: Applies to damage from hurricanes designated as such by the NWS or NHC.

The National Oceanic and Atmospheric Administration’s National Hurricane Center is part of the National Weather Service.

States That Require Hurricane Deductibles

In these states, and the District of Columbia, you’ll have a separate hurricane deductible for damage from hurricanes or named storms:

Alabama
Connecticut
Delaware
Florida
Georgia
Hawaii
Louisiana
Maine
Maryland
Massachusetts
Mississippi
New Jersey
New York
North Carolina
Pennsylvania
Rhode Island
South Carolina
Texas
Virginia

State insurance departments review insurers’ hurricane deductible plans to ensure compliance with local laws and regulations. Rhode Island, for example, caps hurricane and windstorm deductibles at 5%.

When the Deductible Applies

Whether or not you’ll pay a hurricane or windstorm deductible depends on your state’s or insurance company’s definition of a trigger event. The deductible will only apply in certain circ*mstances, as described in your insurance contract.

That’s why reviewing the hurricane insurance details in your homeowners insurance policy is important. Make sure you have copies of the relevant documents in an emergency bag you keep ready in case you have to leave your home in a hurry.

Below are some examples of hurricane deductibles and when they apply.

State	Deductible Amounts (Based on Home’s Insured Value)	Deductible Trigger Event
Connecticut	Up to 5%	Starts when the National Hurricane Center (NHC) issues a hurricane warning in the state and ends the earliest of either 24 hours after the last hurricane warning ends by the NHC or 24 hours after a hurricane is downgraded from hurricane status
Florida	$500, 2%, 5%, or 10%	Starts when NHC issues a hurricane watch or warning in the state; ends up to 72 hours after the NHC ends the last hurricane watch or warning
Louisiana	Commonly 2%-5%	Varies by insurer
New Jersey	Up to 5% mandatory to offer; 6% to 10% optional	Applies to events designated as a hurricane by the NHC reaching sustained wind speeds of 74 mph anywhere in NJ; start and end times for trigger events vary by insurer
New York	Commonly 1%-5%	Varies by insurer
North Carolina	1%	Varies by insurer
Texas	Commonly 1%-2%	Varies by insurer

What Happens If There Are Multiple Hurricanes in a Year?

If you make multiple claims for multiple hurricanes, you could pay your hurricane deductible more than once. Read your policy documents to find out whether your deductible applies per event, season, or calendar year.

For example, Florida has rules that state you only have to pay your hurricane deductible once per calendar year—unless you change insurers after the first hurricane claim.

Calculating Your Deductible

The hurricane insurance deductible is usually calculated as a percentage of a home’s insured value. A hurricane insurance deductible of 5% for a home with $300,000 of dwelling coverage requires the homeowner to pay the first $15,000 of insured damages.

This differs from a standard homeowners insurance deductible, which is a fixed dollar amount that applies to other types of claims. For instance, you might be required to pay the first $500 of eligible damage on a claim. The home’s dwelling value is irrelevant in this case.

Generally, the typical hurricane deductible is 1% to 5% of the home’s insured value, although policies in some vulnerable coastal areas can see deductibles as high as 10%.

Frequently Asked Questions (FAQs)

What Is the Definition of a Hurricane for Insurance Purposes?

Each state and insurer has its own definition, but generally, it means a weather system declared a hurricane by the National Weather Service’s National Hurricane Center.

How Does a 2% Hurricane Deductible Work?

A 2% hurricane deductible generally means your out-of-pocket cost will be 2% of your dwelling coverage. So, if your home’s structure is insured for $400,000, a 2% hurricane deductible is $8,000.

What Is Hurricane Insurance?

Hurricane insurance is a combination of flood and windstorm insurance that protects your home if a hurricane damages it. Flood insurance is usually purchased separately and is available from the Federal Emergency Management Agency's National Flood Insurance Protection program.

Windstorm insurance is usually included in your homeowners insurance policy. Some insurers in certain states may require you to purchase it separately or have a separate hurricane or named storm deductible on your policy.

Is Hurricane Insurance Worth It?

Yes. A single inch of water in your home can cause $25,000 in damage. Then consider damaged or destroyed roofs, sidings, electrical and plumbing systems, and more from a direct hurricane hit, and you could easily pay tens of thousands to $100,000 or more to repair your home. If you have a mortgage, your lender may also require you to carry windstorm or flood coverage, sometimes even if you aren’t in a high-risk area.

The Bottom Line

Hurricane deductibles were introduced fairly recently following massive hurricanes that caused billions in damages. These deductibles are only required in certain states and take the place of your regular deductible after a trigger event. They typically range from 1% to 10% of the home’s insured value. If your policy has a hurricane deductible, understand what you might owe in a worst-case scenario and make sure you have enough in an emergency fund to cover the bill.

Article Sources

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National Hurricane Center. “Preliminary Report: Hurricane Andrew 16–28 August, 1992.”
National Association of Insurance Commissioners. “Hurricane Deductibles.”
Insurance Information Institute. “Background on Hurricane and Windstorm Deductibles.”
MyFloridaCFO. “Florida’s Hurricane Deductible,” Page 5.
MyFloridaCFO. “Florida's Hurricane Deductible.”
Federal Emergency Management Agency. “The Cost of Flooding.”