Hurricane season officially begins June 1, 2019. One of the biggest points of confusion for our home policyholders is understanding what the different deductibles mean on their policy. Especially, since we could be impacted by a named storm. Let’s take a minute to review what the deductibles on your home policy mean.
AOP (All Other Perils) deductible
In general, an insurance deductible is the amount of money you will pay for an insurance claim before the insurance coverage kicks in and the company starts paying you.
The first deductible on a home insurance policy is the AOP (All Other Perils) deductible. This deductible focuses on most everything that does not involve wind, like fire, lightning, theft, vandalism, broken pipes, etc. This is usually listed as a dollar amount on your policy. The most common deductible amounts are $1,000 or $2,500, but you have the ability to decide your deductible amount when discussing it with your agent. When a homeowner files a claim, they would be responsible for paying this amount before the insurance company pays the rest of the claim.
The deductible we want to discuss in detail is the one that would cover you in the event of damage that is wind-related. This deductible can be listed in several different ways on your home insurance policy, Named Storm, Hurricane, or as Wind/Hail.
These deductibles can be displayed two different ways on your policy. They can display as a dollar amount or as a percentage (%) of the building or dwelling value. The percentage amount is the most common way that the Named Storm, Hurricane, or Wind/Hail deductible is listed on a policy in our area.
Named Storm Deductible Example
Let’s walk through an example of a named storm deductible claim. A tropical depression named Gary makes landfall on Hilton Head. When you return from the evacuation, you find a couple of windows broken and shingles off your roof.
Your home dwelling coverage is $400,000 and your named storm deductible is 2% or $8,000. When you file a claim for the damages to your home, you will have to cover the first $8,000 and then the insurance will cover up to $392,000.
Wind/Hail deductible example
Another type of deductible that can be found on a home policy is wind/hail. This type of deductible is commonly listed as a percentage.
Here is an example of how that deductible is different from a named storm deductible. Let’s say your wind/hail deductible is 2% and your dwelling coverage is $400,000.
In this example, a common summer thunderstorm pops up and a tree falls on your house. Like the previous example, you would be responsible to cover the first $8,000 because the wind from the thunderstorm caused the damage.
The big difference here is that any wind or hail damage falls under this deductible amount and it does not have to be a named storm.
Hurricane deductible example
You may have a policy that lists Hurricane as a type of deductible. The amount you would be responsible for with this type of deductible is the same as the previous examples if the damage was caused by a Hurricane.
Any other damage from a tropical storm or thunderstorm would fall under your AOP deductible. Home insurance deductibles can be confusing. As we get close to hurricane season, take a minute to review your policy to make sure you understand which deductibles you have on your policy.
Home Insurance Deductible Comparison
AOP (All Other Perils)
|Wind / Hail||Named Storm||
|Common deductible amounts||
$1,000 – $2,500
|This deductible is applied when damage is …..||Fire and smoke, lightning strikes, windstorm, hail, vandalism, theft, broken pipes, etc.||Caused by wind or hail regardless of whether or not the storm has been named.||Caused by any named storm, tropical depression, tropical storm, hurricane, etc||Caused by an actual hurricane|
It is so important to have an insurance agent that understands the intricate details of insurance and will spend the time explaining your insurance options to you. Someone you can always call and get in touch with. Someone who is fully engaged in our community, who is known and trusted for their sound advice and counsel. We would like to be that agent for you. Please give us a call at 843-252-0840 or visit the contact page of our website at www.hhiandb.com .