An article in today's Wall Street Journal cites the growing trend among insurers to change the methods used to calculate deductibles, especially for damage caused by windstorms and other natural events. According to the article, insurers "increasingly are figuring certain deductibles based on a percentage of a house's value. " The new calculation method can sharply boost a homeowner's cost to repair damages. Insurers in some states let homeowners avoid the new deductibles by paying a higher premium.
Insurers of course must disclose the deductibles on the declarations page of the policy, however, many homeowners do not bother to read their policy. Policyholders are reminded to check if new percentage deductibles have been added to their insurance.
As we all know, confusion over deductibles and coverage limits can affect the repair portion of the claim. We all should be aware of this trend in the industry and be prepared to deal with it in the course of our workday.
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