Windstorm insurance

Homeowners insurance generally covers windstorm and hail damage to your property, and when you file a claim for damages, you pay a fixed-amount deductible before your insurer covers the remainder of the loss. But in several coastal states, many insurance companies now implement separate percentage deductibles (a percentage of your home’s insured value) for losses that result from windstorm or hail damage.

In coastal regions, deductibles typically work as such: you have a dollar amount deductible for losses like fire damage, theft, and non-hurricane wind damage, and a percentage deductible for named hurricane losses. The rules get a little more complicated in states like Texas and Louisiana, where insurers are able to charge percentage deductibles for any type of windstorm damage.

However, the introduction of wind and hail deductibles hasn’t been without controversy,.Consumers on the coast argue that too much is coming out of their pocket in both premiums and deductibles, while insurance companies attest that the clear and expensive tropical storm trend is the reason for transferring more cost to the insured.

If you live on the coast and haven’t been able to find wind and hail coverage, or you simply can’t afford a policy that does, most states offer last-resort plans like FAIR Plans (Fair Access to Insurance Requirements) and Beach Plans for vulnerable homeowners.

Read on:

• How windstorm insurance works
• How much does windstorm insurance cost?
• What if I can’t get windstorm coverage?
• How to reduce windstorm damage

How windstorm insurance works

Windstorm insurance varies based on the company, the state you live in, and whether or not you’re in a specific zip code or coastal area. Some states have certain laws and regulations that limit insurers’ implementation of windstorm deductibles; they may also limit how high a percentage of the insured property they can charge.

Other states aren’t as stringent, and insurance companies are given more autonomy over wind deductible implementation and applied conditions.

Windstorm insurance variations

Florida state law stipulates that insurers can only apply wind and hail deductibles for damages when the National Weather Service (NWS) has given an official hurricane warning and up to 72 hours after the warning ends.

Texas, on the other hand, implements dollar amount deductibles for damage caused by perils like fire and theft as well as wind and hail deductibles for wind damage caused by any source, not just hurricanes.

Deductibles get even more complicated in Louisiana, which has four separate deductible provisions in a standard policy: fixed dollar amount deductibles for non-wind damage; named hurricane deductibles; “named windstorm” deductibles if winds reach 39 miles per hour but aren’t necessarily hurricane winds; and wind and hail deductibles for wind damage regardless of its origin, be it hurricanes, tornadoes, or any type of storm.

However, not every insurance company in every coastal state imposes wind and hail deductibles, and policy offerings may vary depending on your zip code and proximity to the ocean.

Insurers in North Carolina, for instance, may write broader, “all-risk” policies for residents in inland Charlotte, but may completely exclude wind and hail coverage for residents within 100 miles of the Atlantic Coast. When shopping around for policies, inquire about companies’ level of coverage and whether or not they offer windstorm protection — you may be able to find an insurer that offers all-risk coverage with standard deductible provisions.

How do windstorm deductibles work?

Windstorm deductibles can be characterized as hurricane deductibles, named storm deductibles, and wind and hail deductibles, and deployment of the various deductible provisions depends on your insurer and state regulations.

Generally speaking, windstorm deductibles range anywhere from 1% to 10% of your home’s insured value, or dwelling coverage limit. That means if your home was insured for $300,000 with a 2% deductible, you’d be responsible for at least $6,000 in wind- or hurricane-related damages. Percentage deductibles are indicated on your policy’s declarations page.

Some insurers may also offer alternative deductible options based on your needs. You may be able to pay a higher premium in exchange for, say, a fixed $2,000 deductible, that’s significantly lower than the $6,000 you’d otherwise be paying, or you may be able to lower premiums in exchange for a far higher deductible, like $10,000.

Where do I need windstorm insurance?

Here’s a list of states where it’s common for insurance companies to trigger separate wind and hail deductibles for perils ranging from hurricanes to tornadoes.

• Alabama
• Connecticut
• Delaware
• District of Columbia
• Florida
• Georgia
• Hawaii
• Kansas
• Louisiana
• Maine
• Maryland
• Massachusetts
• Mississippi
• Missouri
• Nebraska
• New Jersey
• New York
• North Carolina
• Oklahoma
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Texas
• Virginia

How much does windstorm insurance cost?

The amount you pay for windstorm insurance, like standard homeowners insurance, is determined by how large your home is, how much it’d cost for a full rebuild, the condition of your home, and the location of your home.

Homeowners insurance rates in coastal communities are generally among the highest in the country, and it isn’t uncommon for policyholders in coastal Florida to be quoted at $4,000 in premiums.

You’ll also pay more in premiums if you live in states that experience high incidence of tornadoes, like Oklahoma and Kansas. In fact, premiums are generally far higher for Tornado Alley states than certain coastal states like Vermont and Delaware. Below is a list of states and their average annual premium in 2015, according to the Insurance Information Institute.

What if I can’t get windstorm coverage?

Insurance companies may deny your application if you’re deemed too “high-risk” to be covered. If you live in an area with a high incidence of theft, or your home has old wiring and is a fire hazard waiting to happen, or you live in an area prone to severe weather such as hurricanes, tornadoes, and harsh windstorms, you may be turned down.

In fact, in certain coastal communities, it can be next to impossible to find private market windstorm coverage. As an alternative, you have the option of obtaining coverage through state insurance pools in the form of FAIR Plans (Fair Access to Insurance Requirements), Beach and Windstorm Plans, or you can use your state’s Coastal Market Assistance Program (C-MAP) to assist you in finding a private plan.

FAIR Plans

FAIR Plans are available in every state and are last-resort insurance options if you haven’t been able to find windstorm coverage elsewhere, although policies are generally more expensive than private plans and offer less coverage. In some states, for example, FAIR Plans offer no liability coverage and actual cash value payments instead of replacement cost value payments.

Beach and Windstorm Plans

Beach Plans, like FAIR Plans, are last-resort policies if you’ve been turned down by private companies and need insurance now. The main difference is that Beach Plans only operate in specific coastal areas and are written primarily for wind and hurricane damage, whereas FAIR Plans are statewide and written to cover a broader range of perils.

Coastal Market Assistance Program (C-MAP)

If you’re having a hard time finding coverage but don’t want a state-run plan, your state may have a C-MAP program that can put you in touch with insurance companies that provide adequate windstorm coverage.

How to reduce windstorm damage

There are certain areas of your home that are more susceptible to windstorm damage than others, such as your roof, windows, doors, patios, and landscaping. In order to prevent wind and debris from turning parts of your home into access points for water and further damage, you should take the following steps:

• Trim branches and trees
• Secure outdoor furnitures or anything that may act as potential debris
• Consider installing a disaster-proof garage door
• Install storm shutters or put plywood over your windows and glass doors prior to a tropical storm
• Consider getting impact-resistant storm shingles installed on your roof