Editor's note: This column was updated November 1 to reflect an announcement made by the New York governor's office regarding hurricane deductibles.
Homeowners affected by Hurricane Sandy might be on the hook for more out-of-pocket costs than they expected. That's because their hurricane deductibles are likely higher than their standard homeowners insurance policy deductibles.
DOWNLOAD: The Kip Tips iPad App
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A standard homeowners policy deductible is usually $500 or $1,000, according to the Insurance Information Institute. However, hurricane deductibles are 1% to 5% of the insured value of the home. They can be even higher in some coastal areas with high wind risk, according to I.I.I. So a homeowner whose house is insured for, say, $200,000 with a 5% deductible, would have to pay $10,000 out of pocket before insurance kicked in to cover the cost of repairs.
Eighteen states and the District of Columbia allow insurers to include hurricane deductibles in their policies. The states are Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas and Virginia. If you live in one of these states, check the declarations page of your policy for details about your hurricane deductible. Whether it applies to a claim depends on a specific trigger selected by the insurance company, according to I.I.I. The triggers can vary by state and insurer.
New York Governor Andrew M. Cuomo announced November 1 that homeowners in the state will not have to pay hurricane deductibles for damage caused by Sandy. The New York State Department of Financial Services told insurers that deductibles should not be triggered because Sandy did not have sustained hurricane-force winds when it made landfall in New York. The department also will be sending its mobile command center to hard hit areas to help people with insurance questions and problems.
-
Five Ways to Save on Vacation Rental PropertiesTravel Use these strategies to pay less for an apartment, condo or house when you travel.
-
How to Avoid Annoying Hotel Fees: Per Person, Parking and MoreTravel Here's how to avoid extra charges and make sure you don't get stuck paying for amenities that you don't use.
-
How to Appeal an Unexpected Medical Billhealth insurance You may receive a bill because your insurance company denied a claim—but that doesn’t mean you have to pay it.
-
Amazon Prime Fees Are Rising. Here’s How to Cancel Your Amazon Prime MembershipAmazon Prime Amazon Prime will soon cost $139 a year, $180 for those who pay monthly. If you’re a subscriber, maybe it’s time to rethink your relationship. Here’s a step-by-step guide to canceling Prime.
-
How to Haggle for Almost AnythingSmart Buying Learning how to haggle is an invaluable skill. These strategies will help you negotiate a better price for just about any product or service.
-
Disability Insurance Can Provide COVID CoverageCoronavirus and Your Money If you are concerned about long-term complications from COVID-19, consider disability insurance coverage.
-
21 Things You Can't Return to Amazon — Either Online or In-StoreDid you know there are things you can't return to Amazon? Before tossing these items into your shopping cart, be sure to read Amazon's return policy first.
-
How to Avoid a Charity Scampersonal finance Scammers never quit, even when you're trying to be altruistic. But you can avoid getting duped if you do your homework.
