No hurricane deductibles for Irene in N.J.

Consumer Reports News: September 02, 2011 05:38 PM

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Homeowners insurance

Great news for New Jersey homeowners who suffered wind damage from Hurricane Irene, which swept up the east coast last weekend: Your property insurer cannot impose its onerous hurricane percentage deductibles, which run from 1 to 4 percent of your coverage amount, or a whopping $3,000 to $12,000 on a dwelling insured for $300,000.

In an August 29 bulletin (PDF) to Garden State home insurers, the New Jersey Department of Banking and Insurance directed that, "no mandatory or optional hurricane deductible should be applied to the payment of claims for property damage attributable to Hurricane Irene."

Instead, your standard dollar deductible for wind damage will apply, says Marshall McKnight, an NJDBI spokesman. Check your policy for the exact amount.

The lucky break results from a combination of good state consumer protections and a weakening of the storm after it slammed through North Carolina and other southern coastal states. For hurricane deductibles to apply in New Jersey, direct or indirect damages must be caused by "a hurricane named by the National Weather Service or its successor from which sustained hurricane force winds of 74 miles per hour or greater have been measured in New Jersey by the National Weather Service." Irene didn't make the grade by the time it reached Jersey.

In recent years, insurers put percentage hurricane deductibles in place to limit their risk from extensive windstorm damage. Every state has its own laws and regulations regarding what level of wind and weather action triggers the hurricane deductible. We'll keep you posted about other states that give homeowners safe haven from these secondary financial storms.

—Jeff Blyskal