More Insurers Are Waiving Higher Hurricane Deductibles For Irene's Wreckage
September 5, 2011
An increasing number of property-casualty insurers have agreed to waive higher deductibles that they could have applied to home damage caused by Tropical Storm Irene.
The difference could save thousands of dollars for homeowners who won't have to pay out of pocket for a larger portion of damage caused by the storm.
Last week, some insurers said Irene -- which was downgraded from a hurricane to a tropical storm early Sunday, Aug. 28, before it plowed into New England -- would result in a higher hurricane premium. Insurers are allowed under state insurance guidelines to write policies that would put in place higher deductibles for hurricanes -- even up to 24 hours after they are downgraded to lesser storms. However, there's a huge range in the way different insurers handle the so-called hurricane deductible, which left some homeowners protected from the higher out-of-pocket fee while others were not.
On Friday, state officials said they had worked with several insurers and announced that many were waiving the higher deductible. Now, that list includes more companies -- including Allstate, which means that all five of Connecticut's top home insurers are using the standard homeowner's deductible. The difference is a savings of hundreds or thousands of dollars because a standard deductible is often $500, or $1,000, compared with a hurricane deductible of 1 to 5 percent of the home's value.
Gov. Dannel P. Malloy and Insurance Commissioner Thomas Leonardi said that 80 percent of the home insurance market is exempt from higher charge because insurers have either waived the hurricane deductible, or the storm did not meet policy requirements that would have required the more expensive out-of-pocket fee.
Allstate, Bunker Hill, Connecticut FAIR Plan, Farm Family, Farmers Insurance, Fidelity National, Privilege Underwriters Reciprocal Exchange, Quincy Mutual Fire Insurance Company and Universal North America recently joined other insurers in waiving the hurricane deductible. ACE, Fireman's Fund, The Hartford Financial Services Group, Liberty Mutual, MetLife, MiddleOak, New London County Mutual, Safeco, Tower, The Travelers Cos., Utica National, Utica First and Vermont Mutual all agreed last week to waive the fees.
Chubb Corp., Factory Mutual, Hanover, Kemper, Nationwide and Peerless also aren't charging a hurricane deductible because Irene didn't qualify as a hurricane based on policies these companies have written.
State Farm is the largest insurer of Connecticut homes that has not waived the deductible. State Farm was the sixth largest insurer of homes last year -- generating $54 million in homeowner premiums and holding 5 percent of the market share -- after Travelers, Liberty Mutual, Chubb, Allstate and The Hartford, according to the Insurance Information Institute.
The seventh largest insurer, USAA Insurance Group, and the ninth and tenth largest insurers -- Amica Mutual Insurance Co. and Country Financial -- also were not included on the list of insurers waiving higher deductibles.
