Sen. James Sanders Jr., D-10, introduced S.6407 in the state Senate this week. The bill—one of PIANY’s 2021 legislative priorities—would require the superintendent of financial services to establish uniformity in the triggering and operation of windstorm deductibles.
The standardization of the triggers for windstorm deductibles has been one of PIANY’s priorities for a long time. While most insureds understand deductibles, many of them aren’t aware of windstorm deductibles that exist on many property/casualty policies. Unlike traditional flat-dollar deductibles, windstorm deductibles operate as a percentage of a home’s value. The difference between flat-dollar and percentage deductibles can be thousands of dollars.
The triggering event determines whether a windstorm deductible applies to a policyholder’s loss. It is crucial for these triggering events to be fair and reasonable to both the policyholder and the insurer. Unfortunately, there is little uniformity regarding when a windstorm deductible is triggered. Currently, there are more than 100 windstorm deductible triggers approved by the Department of Financial Services. Some of these deductibles trigger when wind speeds hit a certain velocity (e.g., 74 miles per hour, 96 mph). Other deductibles are triggered when the National Weather Service declares a windstorm a hurricane. Having so many different windstorm triggers causes unnecessary confusion and frustration for policyholders.
Uniformity in the way windstorm deductibles are triggered is a critical consumer protection. PIANY applauds Sen. Sanders for introducing this issue to the state Senate. In addition to this Senate bill, Assemblywoman Pheffer Amato, D-23, has sponsored companion legislation that is on its third reading in the state Assembly.