Close this search box.

Table of Contents

Hurricane Deductible


A hurricane deductible is a specific type of insurance policy deductible applicable to damages caused by hurricanes. It is typically calculated as a percentage of the insured property’s value, rather than a flat dollar amount. This deductible only applies when a claim is made due to damage from a hurricane.


The phonetic pronunciation of “Hurricane Deductible” is: Hurricane: /ˈhɝːrɪkeɪn/Deductible: /dɪˈdʌktəbl/

Key Takeaways

<ol><li>Hurricane Deductibles are specific to property insurance in areas prone to hurricanes. They are calculated as a percentage of the insured property’s value and not a fixed dollar amount.</li><li>The trigger for Hurricane Deductibles to apply varies by policy and state. It may come into effect when a hurricane watch or warning is issued for any part of the state, or when a storm has been named, regardless of its category or wind speed.</li><li>It’s important to review and understand the details of your policy, including the deductible percentage and the trigger conditions, because these factors can significantly influence out-of-pocket costs when a hurricane causes damage.</li></ol>


A Hurricane Deductible is an important term in business/finance, particularly in the insurance industry. It is a type of deductible that applies specifically to damage caused by hurricanes. It is important because it can directly impact the policyholder’s financial responsibility in the event of such a disaster. Conventional homeowners or property insurances often have separate and distinct provisions for damages caused by natural disasters like hurricanes. The deductible, usually expressed as a percentage of the property’s value, can greatly impact the out-of-pocket costs for the insured after a hurricane. Therefore, understanding hurricane deductibles is crucial for policyholders as it allows them to evaluate their financial risk and choose suitable insurance plans.


A hurricane deductible is an element built into insurance policies to manage the risk and potential cost of damage caused specifically by hurricanes. The primary purpose of a hurricane deductible is to balance the financial liability between insurance providers and policyholders for extensive damage that hurricanes can impose on insured property. Hurricanes often result in broad scale, high-cost damage, and these deductibles enable insurance companies to remain solvent even after major hurricanes, by sharing some of the risk costs with policyholders.The hurricane deductible is used specifically when a claim is made on an insurance policy for damage caused by a hurricane. The deductible amount is usually defined as a percentage of the insured value of the property rather than a flat dollar amount that you generally see in other types of insurance coverage. The specific percentage can vary based on factors such as geographical location and level of risk for hurricanes. This means that the policyholder is responsible for paying that proportion of the damages out-of-pocket before insurance coverage is applied. This arrangement ensures that homeowners are financially invested in the security of their properties and that preventive measures are taken to mitigate the potential damage in hurricane-prone areas.


1. Homeowner’s Insurance: A real-world example of hurricane deductible can be seen in homeowner’s insurance policies, especially in areas prone to hurricanes such as Florida or Louisiana. Suppose a homeowner has $200,000 of coverage on their house with a 5% hurricane deductible. If a hurricane causes $50,000 worth of damage, the homeowner would be responsible for $10,000 (5% of the total coverage), before the insurance coverage kicks in.2. Business Property Insurance: If a business property located in a hurricane-prone area (for example, a hotel in Miami) has a property insurance plan including a hurricane deductible clause, they will be required to pay a certain percentage of the damage before their insurance becomes active. Thus, if a hurricane creates a loss of $1 million and the hotel’s policy has a 2% hurricane deductible, the hotel would need to cover $20,000 out of pocket before the insurer pays the remaining amount. 3. Auto Insurance: While less common, some comprehensive auto insurance policies may also include hurricane deductibles. If a car owner in North Carolina has a car worth $15,000 and carries a policy with a 1% hurricane deductible, in the event a hurricane damages the vehicle causing a loss of $5,000, the owner would be responsible for paying $150 (1% of the car’s value), and the insurance would cover the rest.

Frequently Asked Questions(FAQ)

What is a Hurricane Deductible?

A hurricane deductible is an amount a policyholder must pay out-of-pocket when filing an insurance claim related to damage specifically caused by a hurricane. Unlike standard deductibles that are a set amount, hurricane deductibles are usually a percentage, typically between 1 and 5% of the insured property’s value.

How is a Hurricane Deductible applied?

A hurricane deductible is applied when an insured homeowner files a claim for damages caused by a hurricane. The insurance policy will specify a percentage of the home’s insured value that must be paid before the insurance coverage kicks in.

Is a Hurricane Deductible the same as a regular deductible?

No, a hurricane deductible is not the same as a standard deductible. Whereas a standard deductible is a set dollar amount, a hurricane deductible is presented as a percentage of the property’s value and it typically ranges from 1% – 5%.

Does a homeowner need to pay the Hurricane Deductible even if the damage is minor?

Yes, in most cases, a policyholder will still need to meet their hurricane deductible before insurance covers the rest of the loss, regardless of the extent of the damage.

Which states require a Hurricane Deductible?

States with hurricane deductibles policies are usually those at high risk for hurricanes and typically include the East Coast states and Gulf Coast states. However, the requirements can vary from state to state, it is advisable to inquire about this from your insurance provider.

How can I find out what my Hurricane Deductible is?

The deductible can usually be found in your homeowners insurance policy documents. If you’re unsure about the deductible or have trouble finding it, contact your insurance provider directly for clarification.

Can I lower my Hurricane Deductible?

Some insurance companies may offer lower hurricane deductibles at an additional cost. The potential to lower your deductible often depends on factors like geographical location, age of your home, improvements made to withstand hurricanes, etc. However, it’s important to weigh the costs associated with a lower deductible against the lower out-of-pocket expenses in case of a claim.

Related Finance Terms

  • Homeowners Insurance: This is a policy that generally covers damages caused to your property in various scenarios. However, it’s worth noting that not all policies include hurricane damage – it often requires special consideration like a hurricane deductible.
  • Percentage Deductible: Related to hurricane deductibles, this is a type of deductible commonly used in homeowners insurance, where the deductible cost is dependent on a percentage of the home’s insured value.
  • Named Storm Deductible: Similar to hurricane deductibles, named storm deductibles apply to damages caused by storms that have been named by the National Weather Service, i.e., tropical storms or hurricanes.
  • Windstorm Damage: The destruction caused by high-speed winds, often from hurricanes. This damage can be subject to a hurricane deductible for repairs to be made on an insured home.
  • Insurance Claim: This is a formal request made to an insurance company for coverage or compensation for a covered loss or policy event. After a hurricane, homeowners would file a claim to cover damages, in line with their hurricane deductible.

Sources for More Information

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More