Ask Liz: Hurricane Deductibles

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Chris Gordon,

The wild weather of the last few weeks brought with it many questions about insurance and claims. It's important to know that many insurance companies now have a hurricane deductible, which is  different from a typical deductible found in homeowner's insurance.

The Insurance Information Institute explains that the hurricane deductible was created after increased coastal development and greater hurricane risks. Unlike a standard homeowners insurance policy deductible (usually $500-$1,000), hurricane deductibles are calculated as a percentage of the insured value of a house (this typically varies from 1percent to 5 percent). So you could be paying thousands of dollars before your hurricane coverage kicks in.

When it comes to rules and regulations in our region, each jurisdiction has a different take on the hurricane deductible.

In Maryland, companies are only allowed to use the hurricane deductible if the customer's home is in a location that was subject to a hurricane warning. That means that residents of Caroline, Dorchester, Somerset, St. Mary's, Talbot, Wicomico and Worcester counties can be charged a hurricane deductible for Irene. All other counties in Maryland were not under a hurricane warning, which means insurance companies cannot charge this special rate.

In Virginia, companies can increase deductibles for any "named storm" and even for general wind damage. In the District, homeowners should check their policies to make sure any increases to their rates are valid.

If you do get denied by your insurance, you could get some help at tax time. Storm victims can file personal casualty loss. There are standards that have to be met (example: the damage or loss must exceed $100). For more information on whether storm damage is eligible for a tax deduction, visit the IRS website.

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