Fla. Residents Brace Themselves for Charley’s Visit

August 12, 2004

Residents of coastal areas can take steps now to make the insurance claims process move smoothly should their property be damaged by Hurricane Charley, according to the Insurance Information Institute (I.I.I.).

According to the National Hurricane Center in Miami, as of 2 p.m. ET, Charley had grown to a Category 2 storm with maximum sustained winds of 105 mph (165 kph).

Hurricane damage is covered under standard homeowners/renters policies. If a home is damaged or destroyed by a hurricane, residents will be covered for the cost of temporary repairs to prevent further damage. If the storm makes one’s home uninhabitable, they will be covered for reasonable additional living expenses.

Flooding is generally not covered under standard homeowners policies, but is available through the Federal Emergency Management Agency’s National Flood Insurance Program (NFIP).

By Florida statute, the application of hurricane deductibles is triggered by windstorm losses resulting from a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service and remain in effect for the time period during which hurricane conditions exist anywhere in Florida, ending 72 hours following the end of the last hurricane watch or warning.

Hurricane deductibles in coastal Florida areas range from two to five percent. For homes valued at under $100,000, insurers offer a $500 hurricane deductible and a two percent of policy limits deductible. For homes valued in excess of $100,000, insurers must offer the two percent deductible, but the $500 deductible need not be offered if the insurer guarantees that it will renew the policy for another year. The maximum allowable deductible is two percent for homes valued under $100,000, five percent for homes valued between $100,000 and $500,000, and unlimited for homes valued in excess of $500,000.

Hurricane deductibles and their triggers are standard for the private or regular market as well as Florida’s Citizens Property Insurance Corp., the state-run program which provides homeowners insurance to consumers who can’t find coverage in the private market.

For mobile homes, the law allows a hurricane deductible up to five percent of the value when there is a lien on the mobile home and up to 10 percent for mobile homes when there is no lien.

The program operates in designated areas in 29 of Florida’s 35 coastal counties, generally within 1,000 feet of the Atlantic Ocean, Gulf of Mexico or Intercoastal Waterway and on barrier islands.

In Dade, Broward and Palm Beach Counties, the areas east of I-95 extending as much as five miles from the coast, are eligible. All of Monroe County (the Florida Keys) is eligible. The cities of Pensacola, Sarasota, Daytona Beach, South Daytona Beach and Ormond Beach are eligible.

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