THURSDAY, APRIL 3, 2014
Have you received your homeowners insurance policy renewal and noticed you suddenly have two deductibles?
Or had a claim and discovered then you had 2 deductibles?
Yep- homeowners insurance. To paraphrase Bob Dylan, ".......it is a-changing."
Why are two deductibles now becoming necessary?
Two words- Mother Nature. She’s been on a roll for the past few years and the industry has been smacked upside the head with wind and other weather-related claims. As an example, in 2012 the estimated costs of claims in Ohio from the June 29 “derecho” and a smaller, yet still violent storm two days later, are $845 million, making it the state’s third costliest disaster in recent history (https://www.ohioinsurance.org/one-year-anniversary-of-ohio-derecho-is-june-29/).
Many Ohio homeowners insurance policies now contain TWO separate deductibles
A big change is the introduction of separate “per peril” deductibles. Perils are the cause of a claim. For example, several of our Ohio homeowners insurance companies have introduced a “Wind/Hail” deductible, as well as an “All Other Perils” deductible.
Here's the difference between the TWO deductibles
One deductible is for wind and hail claims only.
The other deductible is all for "All Other Perils." Examples include fire, lightning, vandalism, theft and the weight of ice, snow and sleet (among many several other possibilities).
With our companies, we're seeing a typical wind/hail deductible of $1,500. The "All Other Perils" deductible is often lower, for example $1,000. So a fire claim would equal a $1,000 deductible. A tornado- $1,500.
How these two deductibles work in real life
If you have a claim OTHER than wind and hail, you will pay the "All Other Perils" deductible. For a wind or hail claim, you will pay THAT deductible.
Ohio homeowners insurance companies also may offer you a "buyback" for the wind/hail deductible. For example, you pay extra premium and get it reduced to $1,000. And perhaps even $500. Depends on the company.
A note: We've also seen the wind/hail deductible amount determined by the amount of coverage on your house. An example- if the home amount is less than $400,000, it’s $1,500 minimum deductible. If it’s over $400,000, it’s $2,500. So this might be the situation in your case.
Here's you what you need to take away from this
If you notice your premium has DECREASED or even just stays the same, it’s probably due to a change like I’ve just described. Ohio homeowners insurance premiums are NOT decreasing as a general rule. So that’s a red flag.
Our specialty is Ohio homeowners insurance.
Contact Alan Galvez Insurance at (937) 592-4871 to discuss your homeowners insurance policy or visit our dedicated homeowners insurance page for additional helpful resources and to request your quote.
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