Know your homeowners policy before a hurricane hits
With the 2013 hurricane season now upon us, the Louisiana Department of Insurance (LDI) is reminding Louisiana consumers about important information regarding their homeowners insurance policies.
Following hurricanes Katrina and Rita, many insurance companies in states prone to severe weather began adding separate hurricane, named-storm and wind and hail deductibles to insurance policies, according to LDI.
Unlike standard homeowners insurance deductibles, which are usually a flat fee ranging from $250 to $1,000 depending on your insurer, hurricane deductibles are typically between two and five percent of the homes insured value. That means that if you have a home with an insured value of $250,000 and a two percent hurricane deductible, you would have to pay $5,000 up front before your insurer would kick in to cover damages. A similar home with a five percent deductible would be required to pay $12,500.
Hurricane deductibles vary by company, according to LDI. You can find out how much your deductibles are by checking out the first page of your insurance policy, or by contacting your agent or producer.
To help consumers manage the cost of these higher deductibles, the Louisiana Legislature passed the single season hurricane deductible law following the 2008 hurricane season in which residents were hit by hurricanes back to back (Gustav and Ike). Now known as Act 134 (LSA-R.S, 22:1337), this legislation states that only one hurricane, named-storm or wind and hail deductible can be applied to a homeowner’s insurance policy for all hurricanes and named-storms occurring in a single calendar year or storm season. Once the full amount of the hurricane deductible is met by the consumer, the standard all peril deductible will be applied to any other hurricane or named-storm that occurs during that year.
Following a hurricane, you may find yourself in a situation where the amount of money it would cost to fix your home is less than what it would cost to pay your hurricane deductible, thus prompting you take care of the damages on your own. If this happens, it is vital to keep receipts for the items you purchase as the money you spend will count towards your deductible if your home is damaged by a second storm during the same storm season.
For more information on hurricane deductibles, contact the LDI at (800) 259-5300 or visit their website at http:// www.ldi.louisiana.gov.
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