Should You Decline or Accept Hurricane/Named Storm Coverage?

If you decline hurricane/name storm coverage on your homeowners’ policy, your insurance will not pay for wind damage caused by a hurricane or other named storms. Florida allows that choice, but it requires a formal rejection. If your home has a mortgage or lien, your lender must also approve it in writing.

What does declining coverage mean?

It means you are choosing not to have insurance pay for windstorm damage during a hurricane/named storm.

Florida defines hurricane/named storm coverage as coverage for loss or damage caused by windstorm during a hurricane/named storm. That includes certain interior damage when wind first damages the building and creates an opening that lets rain or other elements in.

If you decline that coverage, damage that would otherwise fall under that windstorm coverage becomes your responsibility.

If your policy includes hurricane coverage, how does the deductible work?

If your policy includes hurricane/named storm coverage, it will usually include a separate hurricane/named storm deductible.

That deductible is the amount you pay first before your insurance pays the rest of a covered hurricane/named storm claim. In many Florida policies, the hurricane/named storm deductible is 2% of the Dwelling, or Coverage A, amount listed on the policy.

Here is what that could look like:

If your Dwelling, or Coverage A, amount is $500,000, a 2% hurricane/named storm deductible would be $10,000

If your Dwelling, or Coverage A, amount is $750,000, a 2% hurricane/named storm deductible would be $15,000

If your Dwelling, or Coverage A, amount is $1,000,000, a 2% hurricane/named storm deductible would be $20,000

When might declining the coverage make sense?

Declining the coverage makes sense if you have the financial resources to handle major wind damage yourself and are comfortable taking on that risk in exchange for a lower premium.

If you decline it, you are taking responsibility for windstorm damage that would otherwise be covered.

When might having the coverage make more sense?

Having the coverage makes sense if paying for major storm repairs out of pocket would be difficult, if you do not have substantial cash reserves, or if you would need financing to recover after a storm.

If your home has a mortgage or lien, your lender will also need to approve any decision to decline the coverage.

Does hurricane/named storm coverage include flood damage?

No.

Florida's hurricane/named storm coverage definition does not include flooding. Rising water, storm surge, and similar flood losses are separate and are handled through flood insurance.

What should you do to protect yourself financially if you decline it?

If you are considering declining windstorm coverage, review:

• how much cash you have available for repairs,
• whether you have a dedicated reserve for storm damage,
• whether you have access to credit if repairs are extensive,
• how you would pay for temporary housing if the home is not livable, and
• whether your lender would approve the rejection.

Once a tropical storm or hurricane watch or warning is issued in Florida, insurers do not accept new applications or requests to increase coverage. That means these decisions need to be made before storm conditions are approaching.

At Sterling Meadows Insurance Agency, we help Florida homeowners review windstorm coverage, hurricane deductibles, flood coverage, and overall storm risk before hurricane season starts.