The short answer is yes. Every claim has a deductible. However, the more important question is, which deductible applies? Under most residential insurance policies in Florida, there are two main deductibles; one is for hurricane losses and the other for losses due to “other perils.” As their names imply, the hurricane deductible applies if a hurricane damages a property, and if something else causes the damage, the “other perils” deductible applies. Simple enough.
However, things get a bit more complicated if the two claims a homeowner submits in the same calendar year are both from hurricanes. In 2004, Florida experienced one of its most destructive hurricane seasons; four major hurricanes struck the state within six weeks. Following the 2004 hurricane season, the Florida legislature found that “the four hurricanes striking Florida in 2004 resulted in at least 30,000 residential property insurance policyholders experiencing damage from two or more hurricanes for which insurers have applied the hurricane deductible to each hurricane claim. The fact that policyholders have separate hurricane deductibles can result in significant out-of-pocket expense and financial hardship to policyholders.” Fla. S. Comm. on Gen. Gov’t. Appropriations, PCB 10-A (2004).
In response to the 2004 hurricane season, the Florida legislature enacted Florida Statute 627.701(5)(a)(3) which states “If there was a hurricane loss for a prior hurricane or hurricanes during the calendar year, the insurer may apply a deductible to a subsequent hurricane which is the greater of the remaining amount of the hurricane deductible or the amount of the deductible that applies to perils other than a hurricane.”
This statute has a few important implications for Florida property owners. First, unlike insurance policies where the policy runs for twelve months from the date the policy starts, the single-season deductible rule is based on the calendar year. Therefore, two hurricanes can occur within the same calendar year but on different policy periods. The single-season deductible can apply across different policies, so long as the same insurer issues the policies. Second, the subsequent hurricane claim(s) will still have a deductible. It will be the greater of any remaining hurricane deductible and the “other perils” deductible. For instance, if a homeowner has a $5,000 hurricane deductible and a $1,000 “other perils” deductible and the first hurricane caused $20,000 of damage (meaning the carrier paid $15,000 after the deductible) the hurricane deductible was used up and the $1,000 “other perils” deductible would apply for any subsequent deductible. However, if the first hurricane only caused $2,000 of damage (meaning the claim was under the hurricane deductible) and a second hurricane caused $20,000 of damage, the insurance company would have to pay $17,000. The insurance company would apply the remaining unpaid portion of the hurricane deductible ($5,000 minus $2,000) as it is greater than the “other perils” deductible.
Understanding the “single-season deducible” is an important mechanism to reduce the financial hardship to policyholders during an active hurricane season. In 2022, I represented a homeowner whose house was damaged by Hurricane Ian and Hurricane Nicole. The insurance company applied the hurricane deductible for both losses. That issue alone meant that my client was underpaid by approximately $10,000. If you have any concerns or questions about what deductible should be applied to your loss, it's best to seek professional advice to protect your rights and interests as a homeowner.