auto insurance norwell MA gordon atlantic insurance homeowners insurance norwell MA gordon atlantic life insurance norwell MA gordon atlantic boat insurance norwell ma gordon atlantic business insurance norwell ma gordon atlantic
             Auto Insurance          Home Insurance           Life Insurance           Boat Insurance      Business Insurance

    Personal Insurance Blog

    Wind Deductible vs. Hurricane vs. Named Storm Deductibles

    Posted by Geoffrey Gordon

    Thu, Aug 15, 2019 @ 09:40 AM


    You call the insurance company after a big nor'easter or hurricane, with a tree sitting on your house, and they tell you that you have a "wind deductible."  What's that?  

    It's a separate deductible from the one that applies to everything else to lower the cost of storms to insurance companies in wind-prone regions.  There are a few variations beyond just "wind," and we'll look at which are better (if your location limits your choices and have this provision).

    House damaged by tree-927040-edited.jpgWhen a storm hits, the distinction between Named Storm deductibles, Wind storm deductibles and Hurricane deductibles can be important. The distinction is particularly important if you live or own property in a coastal county in Massachusetts, such as Plymouth, Dukes, Barnstable, Bristol, Suffolk and Essex, because all are generally available and choosing the right one might make a difference in the cost to repair your home after a storm. 

    Here's how it works:  these deductibles are applied separately for a higher dollar amount than your standard deductible, known as “all other perils” (AOP) deductibles.  For example, if you have a $1,000 deductible for fire, theft and all other perils and you live on the coast, you may have a $2,000 or higher deductible for windstorm and hail losses.

    More common than dollar amounts however, wind deductibles are often expressed as a percentage of the coverage amount on your home. For example, a 1% wind deductible on a $300,000 home would be $3,000 and a 2% wind deductible would be $6,000.  A 5% wind deductible on a $700,000 home is $35,000!!  Here in coastal Massachusetts counties, 1%, 2% and 5% wind deductibles are common if your property is within a mile of the coast.  

    These deductibles are part of an effort by the insurance industry to limit their storm losses by having homeowners share more of the repair costs when the wind blows.  Informed property owners - that's you - can take steps to protect homes when especially vulnerable to wind damage.  After all, if you have a 5% deductible on half a million dollar house, you’ve got 25,000 good reasons to consider storm shutters, a generator, the highest quality shingles, fewer trees in the yard, and other protections. 

    If you have a wind deductible it normally will appear right on the "declarations" (first) page of your homeowner’s insurance policy.   Different insurance companies use different metrics for these specific peril deductibles. The three most common approaches are:

    1. Windstorm deductibles (the broadest, meaning it will affect the most people)  
    2. Named Storm deductibles (common) and
    3. Hurricane deductibles. 

    The broadest of these three, meaning where it will apply to the most consumer claims, is a Windstorm deductible.  These deductibles apply whenever damage is caused by wind; these include not only hurricanes and other tropical storms but also winter nor'easters and summer thunderstorms.   Any kind of wind damage will prompt this higher exposure to the owner.

    The next category is Named Storm deductibles.  To illustrate, remember the notorious “no-name" storm?  Damage from that storm would not have been subject to a higher Named Storm deductible, but would have under a Wind deductible.  The regular, smaller AOP deductible would have been used for any damage caused by the no-name storm under a Named Storm deductible.    But damage from Hurricane Irene or Hurricane Sandy, or other named storms would have invoked the Wind and/or Named Storm deductible. 

    Finally, there are the most restrictive Hurricane deductibles.  Hurricane Sandy is a good example of the distinction between Named Storm and Hurricane deductibles.  When Sandy made land fall in New Jersey she had been downgraded from a Category I hurricane to a tropical storm. Thus, the lower AOP deductible applied to folks with a Hurricane deductible. Hurricane deductibles have become less common due to the potential for political interference after the fact, as was evident with Sandy.  Some suggested that the downgrade of Hurricane Sandy was precisely announced to shield homeowners from the Hurricane deductible.   Good for consumers with that one event, but insurance carriers quantify risk precisely, and after the fact interference prompted changes for the next event.  Thus what were Hurricane deductibles have morphed into Named Storm deductibles in most coastal regions.

    Many considerations should factor in your choice of insurance companies for selecting homeowners and other property insurance.  But all else being equal, and given the option between Windstorm vs. Named Storm, choose Named Storm as it is more restrictive. Given the choice between Named Storm and Hurricane deductible, you should choose a Hurricane as it’s the least likely to be invoked.  

    For more information on the subject, check out our short but super-informative whiteboard video where we give cost examples of various deductible options near the coast.

    If you've just discovered you have a higher wind deductible than you are comfortable with, contact us at 800-649-3252We can also research better offers for you - just click the link below. 

      Coastal Insurance  eBook REQUEST A QUOTE

    Geoff Gordon

    Tags: insurance, homeowners, storm, deductible, wind, windstorm, Coastal, deductibles, named, all other perils, AOP

    Will Naming Winter Storms Affect Your Deductible?

    Posted by Gordon Atlantic Staff

    Wed, Feb 20, 2013 @ 08:10 AM

    Cover your home and car for winter storms with homeowners and auto insurance from andrew gordon incWho’s bright idea was it to name winter storms? Nemo? Really? I don’t know about you, but Nemo just doesn’t quite ring right. The Blizzard of 1978 conjures up powerful imagery of the superstorm of all winter superstorms. All I can say is our recent brush with Mother Nature will forever be the Blizzard of 2013 to me.  

    The Weather Channel apparently decided to name winter storms  in a bid to boost public awareness and coordinate response efforts. Guess I will never get use to winter storms being named after Disney characters. First, there is Nemo. What comes next?  Will a future storm be called “The Little Mermaid”?  Where will it end??

    Okay, to be fair, Nemo was not named after a Disney character, but rather from the Greek name meaning “from the valley” or “nobody” in Latin.  Or perhaps Nemo is named after Captain Nemo, aka Prince Dakkar from Twenty Thousand Leagues Under the Sea. Regardless, I still don’t see the connection with a blizzard.

    Once possible outcome of this seemingly innocuous public relations move to name winter storms is the possibility that insurance companies could apply a higher named storm deductible for damage from a named storm. While I have not seen this happen, it’s a possibility if a carrier carries policy wording that applies a higher deductible for damage from a storm which is named by the National Weather Service or any other recognized meteorological authority. The question remains if the Weather Channel is a recognized meteorological authority by insurers.

    The Weather Channel apparently decided to name winter storms  in a bid to boost public awareness and coordinate response efforts. The Weather Channel announced that in addition to providing information about significant winter storms by referring to them by name, the name itself will make communication and information sharing in the constantly expanding world of social media much easier. As an example, Twitter hash tagging a storm (#Nemo) based on its name provides a one-stop shop to exchange all of the latest information on the impending high-impact weather system.

    The naming of winter storms may have been a PR move by The Weather Channel but the naming could have broader implications within the insurance industry. The intent of a named storm deductible was to apply to tropical storms nearing hurricane strength. #Nemo and his successors open the door for some insurers to apply a higher deductible because now there is a name attached to a blizzard.

    Fortunately, we have not seen a change in deductible practices with any of our carriers as result of winter storm naming. I do not foresee this changing but it’s an interesting twist to the named storm debate. Regardless, our most recent storm will always be #Blizzard2013 to me.

    If you have more insurance questions, feel free to contact us here at Gordon Insurance by clicking the button below.

    INSURANCE QUESTION?  Winter Storm Center

    Tags: winter, insurance, storms, changes, nemo, blizzard, deductible, named

    Latest Posts

    Most Popular Posts

    Have a Question?