Mother Nature has an interesting way of trying to involve herself in our life. Most people are used to the typical ways that nature gets involved in our lives: wind, rain, and snow, depending on where you’re from and the climate you’re used to.
However, as some people have already experienced, the weather can get a little more intense during certain seasons or when a particularly nasty storm decides to billow through the area. For business owners, this be a particularly stressful realization, especially when they haven’t yet taken the time to acquire commercial insurance coverage on windstorm and named storm damage.
What Are Wind Related Deductibles?
When you live on or near the coast, you’re bound to deal with strong winds and wind related storms that can potentially wreak havoc on your commercial property. So how do you best prepare for the storms ahead? It’s less about “if” and more about “when.” The first step is to understand a common element of commercial insurance coverage: deductibles.
Definition of a Deductible
A deductible is the amount of money that needs to be paid before an insurance company will step in and provide financial assistance. For example, if damages to your property are $700 and you have a $500 deductible, then you will need to pay the $500 before your insurance company will begin covering the remaining costs of repair.
It’s important to note that every insurance company will be a little different and will have plans that differ from related companies, even if the type of coverage they are providing is the same. This means that a deductible may or may not be present, depending on the company providing your commercial insurance.
Therefore, it’s important to look into any plan in depth before signing any agreements. Always consult with professionals to verify that the plan you are looking into is the plan you are expecting to get.
Deductibles Are Common in the Insurance Industry
When looking to get commercial coverage for your property, seeing a deductible is fairly common. The amount of your deductible will vary from company to company and will be based on the value of your property.
As an example, some deductible amounts will range between 2% and 5% of the value of your commercial property. Therefore, if you the deductible is 5% and you have a $500,000 commercial property, then you’re looking at a $25,000 deductible. Or in other words, when there’s wind related damage, the insurance company won’t step in until you’ve made a financial commitment of $25,000 to repair the damage.
This method encourages business owners to invest some of that money into wind and storm “proofing” their property before the damage occurs.
Types of Wind Related Deductibles and Coverage
Depending on where exactly you live, how close to the coast your business is, and the commercial insurance provider you choose to work with, you may see different terms and different types of coverage offered. However, the two most common types of coverage are “windstorm” and “named storm” coverage.
Windstorm coverage, or a windstorm deductible, is among the most common type of storm and deductible option out there. Windstorms will affect the widest range of people, in both residential and commercial properties.
A named storm, or sometimes called a named windstorm, is a type of storm or weather phenomena that has been designated by the US National Weather Service (or US National Hurricane Center). In other words, these are the more severe storms that are more known for the destruction that they can cause to homes and businesses all across the coast. Depending on your provider, the insurance company may cover more of the financial reimbursement of the damages.
Choosing the Right Commercial Insurance Coverage
There is no perfect answer when it comes to choosing commercial insurance coverage for your business. It all comes down to where you live, the offers available to you, and the amount of coverage you want in anticipation of wind or storm related damages.
Windstorm deductibles will typically apply to tropical storms, some winter storms, and other wind related weather damage. Named storm deductibles are reserved for damage caused by storms with names (also including tropical storms).
The differences in deductibles can be rather extreme, so make sure you consult with a professional to determine the exact amounts of deductibles and the likelihood of certain storms for where your business is located.
Contact us today to learn more about commercial insurance coverage on windstorm and named storm. We’ll help you understand the importance of getting commercial insurance coverage so that you’re not stuck with as high of repair costs associated with