What's the difference in deductibles?

As client advisors, we want our clients to fully understand their policies and how they will respond in the event of a claim so we welcome any questions prospects may have. One question we get quite often is “what’s the difference in a Wind & Hail, Named Storm, and Hurricane deductible?”.  While the differences might be easy for industry professionals to understand, we find that there is a lot of confusion simply due to lack of education about the subject.

The easiest way to think about Wind & Hail, Named Storm, and Hurricane deductibles is to picture them as a pyramid. The base of the pyramid is going to have the most personal exposure and as you move up toward the top, your personal exposure decreases. At the base you have Wind and Hail Deductibles. That deductible is going to encompass any sort of wind and hail damage, whether it is from a thunderstorm, a hurricane, or anything in between. Statistically speaking, because of the number of perils that the wind and hail deductible encompasses, you are more likely to have a wind and hail claim than you are to have a named storm or hurricane claim. The next level is a Named Storm Deductible.  This is only going to apply if the loss is caused by a named storm- hurricane, tropical storm, tropical depression, etc. If the loss is due to hail or a tornado or a particularly bad thunderstorm or wind that is not associated with a named storm, then you would only be responsible for the All Other Perils Deductible. At the top of the pyramid is the Hurricane Deductible. This only applies if the loss is due to a hurricane. Statistically speaking, you are least likely to have a hurricane claim because it only applies in the event of a official hurricane. As you can see from the graphic, your personal exposure significantly decreases when you go from a wind and hail deductible to a named storm deductible, then it decreases even more when you move up to a hurricane deductible.