Posted on May 19, 2014
Connecticut businesses can expect changes in 2012 for hurricane deductibles on their commercial property insurance. After much dispute about Tropical Storm Irene and other snow storm wind damage, the Connecticut Insurance Commissioner Thomas Leonardi developed new guidelines for just how hurricane deductibles should be applied.
This update especially brings relief for many home and business owners affected in the coastal regions of Connecticut. In August 2011 after Hurricane Irene was downgraded to a tropical storm when it reached Connecticut, many property owners faced paying hurricane deductibles on their property damage claims. Insurance companies originally applied it to policyholders because the downgrade from hurricane to tropical storm occurred less than 24 hours before the storm caused damage.
New guidelines issued by the Department of Insurance require that the National Weather Service declare any storms that hit the state as hurricanes and the winds must be rated at 74 mph or more before an insurer can apply a hurricane deductible.
This is a big win for Connecticut residential and commercial property owners since hurricane deductibles range between two and five percent of a property's value. If a business building is valued at $200,000 with a hurricane deductible of 3 percent, then the business owner would have to pay $6,000 out of pocket. When damage is caused by a tropical storm, this can be a pretty hefty sum to pay. The new hurricane deductible guidelines prevent tropical storms from triggering a hurricane deductible - only usual property deductibles would apply.
Coastal insurance in Connecticut still remains hard coverage to come by since many insurers are hesitant to write commercial insurance policies for properties within a mile of the shore line.