Many homeowners that received damage during the recent storm are now realizing that they have a “windstorm deductible”. If you’re one of these people you may be asking yourself “What is a windstorm deductible?” and “How does it apply to the damage received from the storm?”
The New York Times featured our president, Edward Mackoul, on the explanation of a windstorm deductible in the Real Estate Q&A section on December 21st.
In the article, Edward explained that most policies have both a basic deductible and a windstorm deductible. The basic deductible, which is normally $500 or $1,000, applies to covered causes of loss, like fire damage or damage from a burst pipe. The windstorm deductible, which normally ranges from 1 percent to 5 percent of the policy limit, generally applies for a Category 2, 3, 4 or 5 windstorm loss. The windstorm deductible can be a flat amount, but is more often a percentage of the Total Insured Value (TIV).
“With respect to Sandy,” Edward Mackoul is quoted, “the governor of New York has stated that the storm did not qualify as a hurricane.” Under the National Weather Service’s standards, he said, a hurricane is a tropical cyclone with sustained wind speeds of at least 74 miles per hour. And while Sandy generated wind speeds as high as 80 miles per hour, by the time it made landfall the National Weather Service said it had lost its “tropical characteristics” and was downgraded.
“The normal property deductible should apply,” Mr. Mackoul said, “because wind damage is a normally covered cause of loss.”