Why Your Hurricane Deductible Might Be $15,000 Even in a Quiet Storm Season

Quick Take

• Home insurance premiums are rising about 4% this year even though NOAA expects fewer named storms

• Hurricane and windstorm deductibles often run 1 to 5% of your home's value, not a flat dollar amount

• Standard homeowners insurance usually does not cover flood damage

• Grocery prices are mixed: eggs are down 25.7%, but milk, fruit, and groceries overall are still rising

• Medical debt under $500 or less than a year old is being removed from most credit reports

Why is home insurance still going up if hurricane season is quiet?

NOAA expects seven to 13 named storms this year, fewer than usual, and only two have formed so far, but insurance carriers price for future risk, not this year's storm count. The cost to repair and rebuild homes keeps rising, and that gets passed straight into premiums. The average homeowner is expected to pay about 4% more this year.

Does homeowners insurance cover flood damage?

Usually not. Standard homeowners policies typically don't include flood coverage, which has to be purchased separately. Hurricane and windstorm deductibles also work differently than most people expect. Instead of a flat dollar amount, they're often set at 1 to 5% of your home's value. On a $300,000 home, a 5% deductible comes out to $15,000, an amount that surprises a lot of homeowners who assumed their deductible was a few hundred dollars. Nineteen states plus the District of Columbia use this percentage-based system. Flood claims average around $68,000, so a flood policy is worth checking even outside a flood zone, where coverage tends to be relatively inexpensive.

Why do grocery prices still feel high if the overall number is only up 2.7%?

Eggs are actually down 25.7% from last year, sitting around $2.19 a dozen. But milk is up 5.1% to $4.31 a gallon, fresh fruit is up 4.9%, and beef is up around 15%. Grocery bills feel personal because everyone's cart is different. A national average of 2.7% can hide a much bigger increase for a household that eats a lot of beef or fruit. Meal planning around what's currently cheaper, like lettuce or eggs, can help offset the categories that are climbing.

Can medical debt still hurt your credit score?

Yes, though the rules recently shifted. A federal effort to remove medical debt from credit reports entirely was struck down in court, so there's no blanket federal ban right now. That said, Experian, Equifax, and TransUnion have their own policies, and they're generally removing medical collections under $500, even unpaid ones, along with medical debt less than 12 months old. Anyone with medical debt on their report should pull a free copy at annualcreditreport.com, check the amount and age of each item, and dispute anything that qualifies for removal.

What should you do if you're living paycheck to paycheck and falling behind?

This week's Monday Mailbag letter came from a 50 year old listener supporting his parents and a teenage son while working extra shifts and still falling behind. The advice: triage your bills by consequence, not by who's calling the loudest. Protect housing, utilities, transportation, and food first. Call lenders directly and ask about hardship programs, since most would rather work out a payment plan than repossess a car or shut off utilities. Start an emergency fund with something as small as $10 a week, and track 30 days of spending to see exactly where money is going before making bigger decisions.

Got a money question of your own?

Send it to us at becomingfinanciallyconfident.com and we'll tackle it on a future episode. Join Ralph and Juliet live every weekday from 11:30 AM to 12:30 PM Eastern at becomingfinanciallyconfident.com/live.