Wind or Hail Percentage Deductible Calculations

May 14, 2012

Our insured has commercial property coverage for three buildings at one location in Florida with wind deductible of 5 percent per an ISO Wind or Hail Percentage Deductible endorsement, CP 03 21 06 95. If a wind or hail event damages only one of the buildings at this location, is the 5 percent deductible calculated on the insured value of that damaged building or 5 percent of the insured value of all three buildings? For example, building #1 insured for $100,000, building #2 insured for $200,000, and building #3 insured for $300,000. If only building #1 suffers wind or hail damage, is the deductible $5,000 (5% of 100k) or $30,000 (5% of 600k) ?

Florida Subscriber

Upon reading the ISO CP 03 21 06 95, it is our opinion that the 5 percent deductible would be calculated only on the building that suffered damage. Section B.1. states that to calculate the deductible for specific insurance, other than builders risk, on property not subject to value reporting forms, the deductible is applied to the limit of insurance applicable to the property that has sustained loss or damage. Section A states that a separate deductible is calculated for each building if two or more buildings sustain loss or damage. So, the intent is for each building to have a separate deductible, including instances when only one building out of three sustains damage.