ALDOI Urges Homeowners to Review Hurricane Coverage

August 1, 2003

August ushers in the peak of hurricane season, so the Alabama Department of Insurance is asking Alabama homeowners to check their insurance policies in regards to hurricanes—particularly in the area of deductibles.

In the past five years many insurers changed deductibles for hurricane and wind damage from $500 or $1,000 to a percentage of the insured value of the home ranging from 1 to 5 percent. Homeowners in Alabama’s coastal counties of Baldwin and Mobile are warned to pay particular attention, said Alabama Insurance Commissioner Walter A. Bell.

“We certainly pray that no hurricanes come our way, but we want Alabamians to be alert to what is in their policies in case a hurricane strikes us,” Commissioner Bell said.

Under a percentage-based deductible, a $200,000 home with a 1 percent rate would have a deductible of $2,000. If it were a 5 percent rate, the cost would rise to $10,000.

Some insurers have special hurricane/wind deductibles in Alabama’s inland counties as well that are based on percentages. Commissioner Bell said that’s why everyone—not just residents of Baldwin and Mobile counties—should pay attention.

“Everyone needs to know what is in their homeowners’ policy—regardless of where you live,” Commissioner Bell said. “We’re sounding the warning because of hurricane season, but there are many types of events that can occur and damage someone’s home.

He urged consumers to contact their agents if they have questions about their policies.

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