Current through September 18, 2024
A. Insurers are
required to provide clear and prominent notice of all hurricane deductibles.
Notices of hurricane deductibles must comply with the provisions of this Part
as well as the provisions of Part 14 of this Subchapter.
1. The notice shall be included in the policy
issuance or renewal package or by a separate mailing sent at the time of policy
issuance or renewal.
2. The notice
shall clearly and fully disclose all details pertaining to all hurricane
deductibles.
a. While the information
provided will vary depending upon the specifics of the deductible, at a minimum
the insurer must explain how the deductible will be applied (e.g. applied as a
percentage of loss or as a percentage of Coverage A) and the details regarding
the trigger of the deductible regardless of whether it is stated as a
percentage or otherwise.
b. The
purpose of the notice is to assure that the insured will have all information
necessary to make an informed decision concerning the coverage, exclusions and
deductibles in the policy.
c.
Insurers are strongly encouraged to include the actual dollar amount of the
deductible on the notice. If the insurer is unable to do so, the notice must
specify that the actual dollar amount is included on the declarations
page.
B.
Insurers must offer at least two practical examples of how the hurricane
deductible(s) work.
1. If the insurer is
offering both flat dollar and percentage hurricane deductibles, the insurer
must provide at least one example of each.
2. The examples do not have to be tailored to
the insured value of the specific property but must show clearly how the
deductible works in a hurricane scenario (i.e. a five percent (5%) deductible
on a home with an insured value of $200,000 means that the insured must pay the
first $10,000 of the covered loss).
3. The actual dollar amount of a percentage
deductible applicable to the policy must be shown on the declaration
page.
C. The provisions
of this Part provide the minimum that must be included in the notice. Insurers
may provide any other information to assist in the insureds understanding of
the deductible and its application to the insurance policy.
D. The institution and/or modification of a
hurricane deductible is considered a material change and is subject to the
requirements of Part 14 of this Subchapter.
