Some Homeowners Insurance companies will allow you to exclude wind and hail on your homeowners insurance policy.
We do not recommend you ever exclude this valuable coverage but you need to know it is available to you.
Before you consider this option just know if you have a mortgage company you will not be able to exclude wind and hail from your policy.
If you have no mortgage and believe you can pay wind and hail claims out of pocket, it is an option you can consider.
How much can I save if I exclude wind and hail?
If you live in Southern Louisiana or in New Orleans and are susceptible to hurricanes, you need to look at your Hurricane or wind/hail deductible on your current policy.
ex) 250,000 house with a 2% wind/hail deductible.
Your deductible in the event of a wind/hail event would be $5000.
So any future claims the insurance company will deduct $5000 from any wind claim payments.
Your full HO-3 Replacement Cost policy premium could be $2,000.
If you exclude wind/hail coverage, your premium could be as low as $600.
When you exclude wind/hail coverage it is not only hurricanes you have to be worried about.
Your policy would EXCLUDE
- neighbors tree falling on your house because of a windy day
- hail storm
- thunderstorm with high winds
- missing roof shingles due to a windstorm and water intrusion damages inside your home
- any claim as a result of wind and any resulting damage
Above are just a few scenarios to think about
So how do I determine the value of excluding wind/hail from my homeowners policy?
1) Calculate the premium savings from your current policy and the new premium excluding wind/hail
In the above example (2000 premium minus new premium of 600 = $1400 savings/year)
2) Determine the last time you made a wind/hail claim
Let’s use Hurricane Katrina in 2006 (2016-2006 = 10 years x $1400 = $14,000)
So if you would have excluded wind/hail since your last claim after Hurricane Katrina your total savings to date would be $14,000.
That is $14,000 in your savings account and not in the insurance company’s investment portfolio.
Only a select few of individuals would the above be a viable option for
- Extreme Risk Tolerant with a large reserve of money to pay claims out of pocket
- House is paid for and risk of tornado and hurricane is very low
Things to consider
You need to determine how much does a complete roof replacement cost?
Are there trees located in your neighbors yard that could fall on your house?
Could you financially sustain major wind damage to your house and make the repairs out of pocket?
Once again we do not recommend you exclude wind and hail from your policy.
If your are trying to lower your homeowners insurance premium by excluding wind, there are much better ways to lower your premium.
Here are some tips to consider to lower your premium before you exclude wind on your policy.
- Check the insured value is the replacement cost of your house
- Raise your all other perils deductible
- Lower your personal property coverage to the actual value of your contents
- Consider removing replacement cost on your contents
- Purchase a monitored burglar and fire alarm
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