Tropical Storm Alex

Whenever we see stories about tropical storms and hurricanes we think about Florida, Texas and of course New Orleans, LA.  Those, along with Mississippi and Alabama are the usual suspects of "Named Storm" damage.  Insurance policies in those states are much more complicated and unique than policies we would find in, say, Chicago.

So I wanted to just touch on a few key differences that make insurance in Chicago a whole lot easier than in, Fort Myers, FL, or Galveston, TX.

In high-risk states along the coast of the Atlantic and Pacific Oceans and the Gulf of Mexico have separate, "special" deductibles for wind.  Sometimes it's called "Named Storm" or "wind" deductibles and it applies to damage caused by high winds.  The deductibles are usually a percentage.  That percentage relates to the amount the home is insured at.  So a $1m home with a 5% deductible for wind would have a $50,000 deductible for damage caused by a hurricane, or just high wind in general.  These deductibles can be as low as 1% or as high as 15% for most companies, it depends on factors such as proximity to water and the amount of protection a home has (i.e. shutters and hurricane glass).

I'm often asked from clients in Chicago about coverage for wind.  Illinois doesn't have hurricane problems very often (though Hurricane Ike came through in 2009 and caused massive water damage), so insurance companies don't charge extra for the protection and they don't have separate deductibles.  Unless you're working with an insurance company I've never heard of, you have coverage against wind, and hail, without needing to add it on.

The same is not true for Earthquake coverage, but that's a topic for another time. 

If you have questions on Hurricanes and Tropical Storms please let me know.  I used to work in Newsradio in Texas (740 KTRH), and have rode out a tropical storm, outside, all night, so I have a unique perspective.  (I also like talking about it, as it is one of few positive memories I have of that business)  Find me in the "Contact Us" section.