Jan 10, 2013

Lawmakers seek to limit hurricane deductibles

Two New York lawmakers have called for a dollar limit on hurricane deductibles and a standard restriction on when insurance companies can apply these higher deductibles.

New York Sen. Kenneth LaValle, R-1, and state Assemblyman Fred Thiele Jr., I-1, introduced a bill (S.1760/A.1222) that would block insurers from charging more than $1,500 in hurricane deductibles, which for now range from 1 to 5 percent of an insured property's value.

PIANY has supported legislation to standardize coastal homeowners insurance hurricane deductible triggers, reminding lawmakers that when (not if) a severe hurricane hits New Yorks coastal areas, it will reveal inconsistencies that will cause a public outcry due to inconsistent hurricane deductible triggers.

This lack of standardization causes neighboring homeowners who suffer equal damage from a coastal storm to find that one homeowner has coverage for the damage and the other does not. Standardizing the trigger point at which an insurers hurricane deductible will apply will protect consumers against this type of scenario and needs to be done now.

Recognizing the need to maintain a viable coastal insurance marketplace that preserves availability of coverage, however, PIA does not support a limit on the amount of the deductible. Under Regulation 159 (11 NYCRR 74.1), every homeowners and dwelling fire personal lines policy containing a hurricane deductible is required to display the applicable percentage amount and corresponding dollar amount of the hurricane deductible in the policy declarations.