Like most things, insurance policies should be straightforward to understand. If you were to educate yourself about policies or ask your independent agent to clarify something, it shouldn’t lead to you agonizing over the details.
In the case of homeowner’s insurance in New York, this isn’t a huge problem. Between the many homeowners’ policies in the state, there is a single definition for instances of “fire” and “vandalism.”
However, if a severe windstorm were to blow through your area, you may be left scratching your head. In New York alone, there are over 100 different definitions in the industry approved by the DFS for when a windstorm deductible applies.
What do these differences mean?
Per New York State’s own explanation of windstorm insurance deductibles, they commonly range “from 1% to 5% of either the value of the dwelling or the amount of insurance on the dwelling.
PIANY President Gary Slavin CIC, CLTC, LUTCF (then President-Elect) wrote in a letter to the editor last year that these windstorm deductibles are extremely costly and problematic.
“For example: If your home is valued at $500,000, your 5% windstorm deductible is $25,000.” Slavin writes. “Here’s the problem: If your neighbors have policies with different insurance companies, they may only have to pay their standard deductible.”
Despite organizations such as National Weather Service having a standardized scale in the Saffir-Simpson Hurricane Wind Scale, this is far from the case for insurance in New York.
In PIANYs 2023 Legislative Priorities, it states “Despite the display of deductible amounts in the policy declarations, the majority of policyholders are unaware that different insurance companies have different windstorm triggers.”
“Ultimately,” PIANY’s Legislative Priorities continues. “It is the triggering event that determines whether a windstorm deductible applies to a policyholder’s loss and, therefore, the windstorm definition has substantial effect on out-of-pocket costs for homeowners.”
Slavin proposes that a single definition be adopted, and this makes the most sense. The definition of a windstorm in the realm of insurance should be universal as not to create confusion and cost consumers thousands.
What is being done?
Luckily, action is being taken on this front. Bill A.2866 is moving through the New York State legislature. On May 27 of this year, the bill was signed by the New York State Assembly and is sitting in committee at the New York State Senate.
However, it should be noted that similar bills like A.2866 previously moved through the Assembly only to stall in committee at the Senate.
If you’re concerned about potential windstorm damages and the deductibles you may have to pay, keep a close eye on this bill. In fact, you may want to contact your state Senator to see that this bill reach the governor’s desk.
Matt McDonough is PIA Northeast's writer, editor and content curator. Matt joined PIA Northeast in September 2023. Before that, he had been an editor for the online entertainment magazine Collider from 2021-23 as a copy editor for its lists section. Matt entered the world of journalism at his alma mater, SUNY New Paltz, writing and reporting for the college's student run newspaper, The New Paltz Oracle. He graduated from SUNY New Paltz with a Bachelor of Arts in English and a minor in Creative Writing in 2020.
