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Insurers: Homeowners Should Check Hurricane Deductibles

While flood insurance not an option for many, those with hurricane deductibles should read the fine print to see what they could be responsible for in case Irene hits hard.

As Hurricane Irene makes its way up the Atlantic coast, insurance agents are urging homeowners to check, double check, and triple check their policies to make sure they know what they're in for after the storm.

"We try to counsel homeowners to look closely at their policy," said Mike Barry vice president of media relations for the Insurance Information Institute. "Because sometimes there is language in their policy - it varies from insurer to insurer - where for a Category 2 storm, a policyholder must pay significantly more in the form of a deductible than if it's a less severe storm."

New York is one of 18 states that offers hurricane deductibles for homeowner's insurance. Those deductibles may vary based on the severity of Hurricane Irene – or any other storm for that matter.

"It probably won't vary if it's a Category 2, 3, 4, or 5 storm," said Steve Jones, vice president of personal lines for The Hartford. Jones added that volumes on call centers along the East Coast are on the rise over the past couple days as homeowners have been checking to see exactly what they're covered for.

Currently, Irene is a Category 2 storm. However as it heads north winds are expected to weaken, perhaps falling below even a Category 1 hurricane to a tropical storm. According to models issued by the National Oceanic and Atmospheric Administration, Irene has a 20 percent chance of bringing hurricane-force winds to Long Island. It also reports an 80 percent chance of tropical storm-force winds.

Generally, the hurricane deductible varies between 1 percent and 5 percent of the overall policy, depending on the level of the storm. If a homeowner, for example, has a $300,000 policy with a 2 percent deductible for a Category 1 storm, he or she would pay out $6,000 before benefiting.

"That situation will probably arise if a storm hits Nassau and Suffolk," Barry said.

As the storm jumps to a Category 2 and beyond, so does the deductible as a percentage of the policy. Homeowners are urged to refer to the fine print of their policies to see what exactly those percentage levels are.

One thing homeowners are reminded to protect against, since it is not included in any standard homeowner's policy, is floods. As of June 30, just over 60,000 homeowners in Nassau and Suffolk held flood insurance.

The NWS has already issued a flood watch for the entire Tri-State region from Saturday evening through late Sunday night. Five to 10 inches is expected, "with locally higher amounts are possible [sic]."

"The big thing we try to convey in times like this is that flood coverage is excluded from the standard homeowner policy," Barry said.

North Fork Assemb. Dan Losquadro, R-Shoreham, a former senior property claims investigator with State Farm, suggested the "standard precautions for anyone" protecting against a flood. This includes cleaning gutters and pointing away from the house, particularly basement windows; covering window wells and making sure they're securely fastened; and unclogging drains.

However he, like Barry and Jones, added that all the prep work in the world can only serve as a preventative measure to an extent.

"Sometimes there is quite a bit of damage before a standard policy takes effect," he said. "But if they can mitigate smaller scale damage – siding and things like that – that's the best they can do. Once you get to large scale damage, you should be covered."

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