Hurricanes pose a significant threat to Florida communities. With the potential to bring catastrophic winds and flooding, this phenomenon could cause devastating damage.
As a HOA board member in Florida, you know that hurricane season is a time of heightened anxiety. Having the right insurance coverage is crucial. But did you know that your policy may contain a provision that can significantly affect your community’s recovery after a hurricane? Understanding the hurricane deductible provisions can prevent legal concerns and financial strain on your community.
What is a hurricane deductible?
A hurricane deductible is a special deductible that applies to damages caused by hurricanes or tropical storms. It is usually a percentage of the insured value of the property.
For example, if your community’s insured value is $1 million and the hurricane deductible is 5%, you will need to pay the first $50,000 of damages before the insurer covers the remaining costs.
Hurricane deductibles are designed to share the risk of hurricane damage between the insurer and the policyholder. However, they can also lead to significant out-of-pocket expenses for your HOA.
What can HOAs do?
To minimize the budgetary impact of a hurricane deductible, you should:
- Review your insurance policies to understand the provision
- Consider increasing the community’s emergency fund to cover potential deductible amounts
- Explore options for reducing the hurricane deductible percentage or amount
- Consult with an experienced insurance attorney to ensure you have the legal support they need
Understanding this provision in your insurance policy can help you better prepare for the financial risks associated with hurricane season.
It is also important to note that insurance policies can be complex. An experienced attorney who understands the intricacies of Florida insurance law can guide you throughout the process and toward your community’s recovery.