We are in the midst of an active hurricane season set to break records. Since record-keeping for storms began in 1851, this is the first year 13 named tropical storms have formed before September.
This number includes four hurricanes, only a third of the 12 hurricanes experts are predicting this season. While these are still predictions, property owners on or near the coast should be concerned about this risk.
Damage from hurricanes and major storms carries a heavy price tag. Hurricane Katrina solely caused more than $161 billion in damages.
If your client’s property is significantly damaged, they may face major financial hardship despite carrying insurance coverage. Regardless of the property type, the catastrophic damages caused by hurricanes and major storms are a heavy burden for your clients, and it’s critical to ensure they are protected.
The best way to mitigate this risk and avoid a financial burden for your client is through a deductible buyback policy.
What is a deductible buyback?
A deductible buyback is a policy lightening the financial burden on the insured following a loss by lowering their deductible.
These policies typically cover particular damage sources such as wind and hail or named storms and they reduce the total percentage of the damage your client must cover as a deductible on a wind and hail or hurricane policy.
Here’s an example to illustrate:
Say your client owns a building valued at $1,800,000 with a 5% deductible on its wind and hail policy. If the building is destroyed, the insured would owe $90,000 as a deductible before coverage starts.
If they have a buyback policy in place covering 3% of the deductible, the deductible would only be $36,000. A $54,000 reduction at a time when cash flow is essential.
MJ Kelly offers a wide range of buyback policy options for the needs of every type and scale. Most carriers that write wind exposed properties impose typical deductibles of 5%. Depending upon the total insured value we can buy down those deductibles to either a lower dollar amount or lower percentage. We offer buy downs with deductibles as low as $5,000 for properties below $10,000,000 and $10,000 for those exceeding this valuation.
No states are excluded, and we have no minimum premiums. MJ Kelly has solutions to your client’s needs whatever and wherever they are!
(NOTE: Cannot consider: Mobile homes, Greenhouses, DOL, Solar Panels or Docks/Piers/Wharfs)
Connect with one of our underwriters to get started!