Wind / Hurricane Deductible

In coastal and hurricane-exposed states, the master policy usually carries a separate windstorm or hurricane deductible expressed as a percentage of the insured building value rather than a flat dollar amount. On a multimillion-dollar building, a percentage-based deductible can be a very large number that passes through to owners as a special assessment. Florida Statute 718.111(11) requires association deductibles to be consistent with industry standards and prevailing practice for communities of similar size, age, and construction in the same locale.

The wind deductible is where a covered hurricane loss turns into a special assessment, so it deserves as much attention as the premium. Know the percentage, translate it into dollars against the current insured value, and make sure owners understand that number so they can size HO-6 loss assessment coverage to it. A higher wind deductible lowers premium but shifts risk onto the assessment base; treat that trade as a board budgeting decision, not just an insurance one. In Florida, confirm the deductible is defensible under the 718.111(11) standard rather than simply the cheapest option offered.

In the hardest coastal markets, a lower wind deductible may simply not be available at a workable premium. When that is the case, the board decision shifts from buying it down to funding the exposure and making sure owners carry loss assessment coverage sized to it.