The Times-Picayune reports: In the past three years, the use of hurricane, windstorm or named-storm deductibles, which means that insurance doesn't kick in until homeowners have paid a percentage of the insured value of the home as a deductible when a storm hits, have become commonplace, and can easily add up to the cost of a new roof.
At the same time, some 20,000 homeowners and 6,500 businesses find themselves with insurance policies that don't cover wind damage at all, forcing them to buy "wind-only" policies from Louisiana Citizens Property Insurance Corp., the state-sponsored insurer of last resort.
"That's a huge difference in coverage this time for the property owner, compared with 2005, but it's the world we live in these days," said Insurance Commissioner Jim Donelon. "No question about it, that will adversely affect policyholders."
Hurricane deductibles, as they are known, help keep annual insurance premiums down by forcing homeowners to cover the first share of damage in the type of catastrophe of greatest concern to insurers. As insurance prices skyrocketed after the storm, hurricane deductibles became more common to help keep insurance costs within reach.
Before the storm, they were merely a choice for homeowners, but now they're mandatory in many cases. And what used to be a deductible option of 1 percent to 2 percent is now more commonly 2 percent to 5 percent. Meanwhile, insurers revised the insured value of people's homes after Katrina, so those deductibles are being calculated from a bigger base.
The 20 most common types of hurricane damage and how to prevent them.
HurricaneInsurance.com says:
Each year, flooding alone causes approximately $2 billion of property damage, not to mention the devastation caused by high winds and rain. Despite these risks, however, only 14 percent of Americans have actually purchased flood insurance to protect their property, and even fewer have comprehensive hurricane insurance.
