What is a wind or hurricane deductible in coastal Alabama?

On the Alabama coast, homeowners policies usually carry a separate hurricane or named-storm deductible - a percentage of the home's insured value, not a flat dollar amount. Alabama does not set that percentage or the trigger; the insurer defines both in your policy. On a $300,000 home a 5 percent named-storm deductible is $15,000 out of pocket before coverage starts.

Does Alabama set the percentage or when it applies?

No. The Alabama Department of Insurance treats hurricane and named-storm deductibles as insurer-set terms, not state-mandated ones. ALDOI's own guidance to homeowners is to "read your policy to find out whether the deductible is per event, per season or per calendar year" - because that timing detail is set by the carrier, policy by policy, not by state law.

How large is the percentage typically?

ALDOI states these deductibles "range from 1% to 10% of the value of the insured home." On a $300,000 home, a 5 percent deductible is $15,000 out of pocket for a covered storm loss before the policy starts paying - far more than the flat $500 or $1,000 deductible that would apply to an ordinary, non-storm claim on the same home.

What is the difference between a hurricane deductible and a named-storm deductible?

ALDOI, drawing on the NAIC Consumer Information Insurance Resource Center's definitions, distinguishes two triggers. A hurricane deductible usually applies only to damage from a storm the National Weather Service or National Hurricane Center has officially declared a hurricane. A named-storm deductible is broader: it applies to any NHC-named storm, including tropical storms that never reach hurricane strength. Because named-storm is the wider trigger, it ends up applying to more events over a given season than a hurricane-only deductible would.

What should a coastal homeowner check on their own policy?

Two things, both set in the policy rather than in state law: whether the deductible is measured per event, per season, or per calendar year, and which trigger - hurricane or named-storm - actually applies. The same storm can produce two very different out-of-pocket outcomes depending on which one is written into a given policy.

For example, a named storm - not yet officially a hurricane - floods a Mobile roof. A policy with a named-storm deductible applies the storm percentage to that claim. A policy with a hurricane-only deductible may apply the ordinary, smaller deductible instead, since the storm never reached hurricane strength. Same storm, different out-of-pocket cost, decided by one word in the policy.

See how hurricane coverage works for Mobile homeowners and Mobile flood insurance for the related coverage questions - wind and flood are separate perils with separate deductibles. A coverage review can confirm the exact percentage and dollar exposure on a specific policy.