Note: This guest post is by Frederick “Beau” Kron, an Independent Adjuster, Trainer, Appraiser & Umpire. He has written this post as an Independent Adjuster and not on behalf of the IAUA. Opinions expressed are solely his own and are not meant to express the views or opinions of the IAUA.

This year, a record-tying three hurricanes—Debby, Helene, and Milton—have made landfall in Florida. According to meteorologist Phil Klotzbach, this has only happened five other times in over 150 years, most recently in 2005. Previous occurrences were in 2004, 1964, 1886, and 1871. No season on record has seen more than three hurricanes make landfall in Florida.

For those of us in the industry back in 2004, you might remember grouping Hurricane Ivan with “The 4 of ’04.” Even though it impacted Florida, Ivan technically made landfall in Alabama, just west of the Alabama-Florida border.

In the wake of Hurricane Milton’s recent impact on Florida, a crucial question has emerged for property owners: When a tornado occurs during a hurricane but beyond the boundaries of hurricane-force winds, which insurance deductible applies?

The Milton Effect: A Tornado Outbreak

The National Oceanic and Atmospheric Administration Storm Prediction Center reported 38 preliminary eyewitness accounts of tornadoes during Hurricane Milton – a staggering number considering Florida’s average of 50 tornadoes in an entire year.

This deductible issue is particularly relevant for Palm Beach Gardens, an area that, despite being well outside of the hurricane-force wind path, experienced significant tornado damage — including an industrial dumpster landing on a residential roof.

The questions swirling around which deductible should be applied highlight the importance of understanding your policy’s definitions.

Hurricane Deductible Confusion

Most homeowners policies include a hurricane deductible, typically higher than the standard wind or All Other Peril deductible. But when does this hurricane deductible come into play, especially in cases of tornado damage far away from the hurricane-force winds?

Let’s examine a sample AAA HO3 policy (FL 1000 1007) to shed light on this issue. This policy has a Hurricane Deductible:

SECTION 1 – HOMEOWNERS COVERAGES

PART I – PROPERTY COVERAGES

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CONDITIONS – PART I

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3. Hurricane Deductible

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The hurricane deductible stated on the declarations page applies for loss or damage to covered property caused by all hurricane windstorms. A hurricane percentage deductible is determined by applying the percentage stated on the declarations page for hurricane to the COVERAGE A – DWELLING limit of liability at the time of the loss, but shall not be less than $500.

Deciphering Policy Definitions

The key to understanding whether this deductible applies is in the policy DEFINITIONS section, where terms in bold within the policy are explicitly defined. In this AAA policy, we find:

DEFINITIONS

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Hurricane – means a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service. The duration of the hurricane includes the time period, in Florida:

a. beginning at the time a hurricane watch or hurricane warning is issued for any part of Florida by the National Hurricane Center of the National Weather Service;

b. continuing for the time period during which the hurricane conditions exist anywhere in Florida; and

c. ending 72 hours following the termination of the last hurricane watch or hurricane warning issued for any part of Florida by the National Hurricane Center of the National Weather Service.

***

Hurricane windstorm – means wind, wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane which results in direct physical loss or damage to property.

*emphasis added

The Conclusion

Based on the definitions in this particular policy, it is specifically stated that tornadoes occurring during a hurricane are considered part of the “hurricane windstorm.” This means that even if a tornado causes damage in an area with otherwise mild winds during the hurricane, the hurricane deductible would still apply. Your policy might be different.

Almost ten years ago, in Storm-Induced Tornado Damage, the Merlin Law Blog discussed a similar case where the lower courts deemed the State Farm policy language to be ambiguous. Even though the appeals court ultimately sided with the insurance company, the language in many policies has since been expanded for clarification, as in this AAA policy.

Key Takeaways for Property Owners

1. Review Your Policy: Carefully read your insurance policy, paying close attention to definitions and deductible clauses.
2. Understand the Definitions: Pay attention to how your policy defines terms like “hurricane,” “hurricane deductible,” “hurricane loss,” and “hurricane windstorm.” These definitions can significantly impact which deductible applies.
3. Document Damages: In the event of a loss, thoroughly document all damages, regardless of whether they seem hurricane or tornado-related. Damages caused by tornadoes are not always obvious and can be subtle but significant.

As we navigate the complexities of severe weather events, understanding your insurance policy becomes increasingly crucial. Stay informed with resources like Twelve Tips for Making a Claim for Tornado Damage to Your Property on Your Homeowner’s Insurance Policy, but don’t hesitate to seek clarification on your coverage from a professional.

Disclaimer: This blog post is for informational purposes only and should not be considered legal advice. Always consult with a licensed insurance professional or attorney for guidance on your specific situation.

Bicycles are more than just a mode of transportation; they represent a significant investment for many, especially with the rise of high-end models designed for racing, long-distance rides, or daily commuting. The cost of these bicycles can range from a few hundred to several thousand dollars, making insurance coverage an important consideration.

The Growing Popularity of E-Bikes

The popularity of electric bikes (e-bikes) has surged, offering an eco-friendly and efficient way to travel. E-bikes, which combine traditional biking with an electric motor, provide additional speed and range, making them a favorite among commuters and recreational riders alike. However, they also come with unique insurance considerations due to their higher cost and potential for higher risk of theft and damage.

Insuring Your Bicycle Under Homeowners or Renters Insurance

Most homeowners and renters insurance policies cover bicycles under the personal property section. This means your bike is protected against theft, fire, vandalism, and other covered perils, regardless of whether it is stolen from your home, vehicle, or another location.

Actual Cash Value vs. Replacement Cost:

• Actual Cash Value (ACV): ACV coverage reimburses you for the bike’s depreciated value. For instance, a five-year-old bike will be valued at the current market price for a comparable bike, minus depreciation.
• Replacement Cost Coverage: This option covers the cost of replacing your bike with a new one of similar kind and quality at today’s prices, without deducting depreciation.

It’s crucial to review your policy or consult with your insurance agent to determine which type of coverage applies to your bike.

Liability and Medical Payments Coverage

In addition to property coverage, your homeowners or renters insurance typically includes liability protection. This coverage can protect you if you are sued for causing injury or damage to others while using your bike. For instance, if a driver claims you caused an accident, your liability insurance can cover legal costs and any damages awarded, up to the policy limits, which usually range from $100,000 to $300,000.

Moreover, these policies often include medical payments coverage, which can help pay for medical expenses if you accidentally injure someone while riding your bike. This coverage typically ranges from $1,000 to $5,000.

Considerations for E-Bikes and Accessories

Given the higher value and specific nature of e-bikes, additional coverage might be necessary. E-bikes, along with accessories such as helmets, lights, and specialized gear, can add up in value. If your e-bike is particularly expensive, consider adding a sports equipment floater or endorsement to your policy. This addition provides broader coverage, often with no deductible, ensuring that high-value items are fully protected.

Tips for Properly Insuring Your Bicycle

1. Keep Detailed Records: Retain receipts and a detailed inventory of your bike and accessories.
2. Consult Your Insurance Agent: Discuss your specific needs, especially if you own a high-value or e-bike, to ensure adequate coverage.
3. Regular Policy Reviews: As the value of your bike and accessories changes, update your insurance policy accordingly.

Cycling is a fantastic way to enjoy the outdoors, stay fit, and commute sustainably. Ensuring that your investment is adequately protected allows you to ride with peace of mind. Stay safe and enjoy the ride!

Bancorp’s insurance agents are available to provide you with a free review and consultation.  Contact Us – Bancorp Insurance Call 800-452-6826