New York Finalizes Uniform Hurricane Deductible Regulations

In 2024, the New York State Legislature directed the Superintendent of the Department of Financial Services (“DFS”) to issue regulations establishing uniform standards for the operation of hurricane deductibles in homeowners’ and dwelling fire personal lines policies. The DFS was also instructed to set requirements for notices insurers must provide regarding the amount and application of hurricane deductibles.

DFS completed that process, and the new regulations take effect on February 2, 2026. Below is a summary of the key provisions and initial considerations for insurers as they begin preparing policies that comply with these new requirements.

New Definitions (11 NYCRR 74.0)

The regulations add several defined terms, including:

• “Hurricane” – A tropical cyclone with maximum sustained surface wind speeds (using the U.S. one-minute average) of 74 mph or higher, as determined by the meteorological entity.
• “Hurricane category” – A Category 1–5 rating under the Saffir–Simpson Hurricane Wind Scale as determined by the meteorological entity.
• “Hurricane deductible” – The amount of loss for which a policyholder will be responsible before the insurer will pay, up to the limits of a policy, in the event of a covered loss resulting from a hurricane.
• “Hurricane warning” – An announcement by the National Hurricane Center indicating that sustained winds of 74 mph or higher are expected within the specified area in association with a tropical, subtropical, or post-tropical cyclone.
• “Hurricane watch” – An announcement by the National Hurricane Center indicating that sustained winds of 74 mph or higher are possible in the specified area in association with a tropical, subtropical, or post-tropical cyclone.
• “Landfall” – The intersection of the surface center of a tropical cyclone with a coastline.
• “Proximity to the coastline” – Distance measured from mean high water.
• “Meteorological entity” – The National Weather Service (“NWS”), or if NWS no longer exists or issues information to effectuate the regulations, an entity designated by the DFS Superintendent that performs functions similar to the NWS.

The regulations also define “dwelling fire personal lines insurance,” “homeowners’ insurance,” “policy,” and “NWS.”

Updated Notice Requirements (11 NYCRR74.1)

1. Notice of the Inclusion of Hurricane Deductibles When Issuing or Renewing Policies

Insurers must now provide notice that a policy contains a hurricane deductible whenever the insurers issue a policy with a hurricane deductible.

2. Clarified Explanation of Hurricane Deductible

Policies must include a clear explanation that the hurricane deductible is the amount the policyholder must pay before the insurer will pay for a covered loss resulting from a hurricane (up to the policy limit). The prior regulation referred to losses “caused by” a hurricane. This slight, but important change aligns the mandatory notice with the new definitions.

3. The New Mandatory Definition Notice

Insurers must now provide policyholders with the regulatory definitions of:

• hurricane
• hurricane warning
• hurricane watch
• landfall
• proximity to the coastline

4. Explanation of When the Deductible Applies

In addition to the explanations insurers previously had to provide, insurers must now provide:

• A statement that the hurricane deductible applies in the aggregate to total losses under all affected coverage parts.
• A clear explanation of the hurricane category that triggers the hurricane deductible; and
• A statement that the hurricane deductible applies only to losses resulting from damage caused by wind occurring within the period beginning 12 hours before a hurricane makes landfall in New York and ending 12 hours after the meteorological entity cancels the last hurricane watch or warning for the State.

Policies must also state that the hurricane deductible applies to total losses across all affected coverage parts.

New Minimum Standards for Applying Hurricane Deductibles (Section 74.4)

This section is entirely new and contains the most substantive change.

Although insurers are not required to include hurricane deductibles for policies issued in New York, they may do so only if they demonstrate to DFS that there is a sufficient exposure to a hurricane risk to justify the deductible.

When policies contain a hurricane deductible, insurers must meet new minimum standards, including:

1. Triggering Event

A hurricane deductible only applies when the meteorological entity determines that a hurricane, as defined by the regulation, made landfall in New York.

2. Timeframe for Application

The regulation imposes a timeframe for insurers to apply the hurricane deductible to:

• 12 hours before the hurricane makes landfall in New York, to
• 12 hours after the cancellation of the issued hurricane watch or hurricane warning that had been issued in the State.

3. Hurricane Deductibles Can Vary Based on Location

The regulations allow insurers to determine what the hurricane deductible should be based on the county and/or the property’s proximity to the coastline.

4. Scope of Losses Falling Within Hurricane Deductibles

Hurricane deductibles apply only to loss resulting from damage caused by wind. They cannot be applied to loss-of-use coverage (e.g., additional living expenses or loss of rental income).

5. Criteria When Adjusting Hurricane Losses

The insurer can only apply one deductible if multiple deductibles could apply to a single loss. While the insurer may apply the higher deductible, it must aggregate all covered losses caused by the hurricane when determining if the deductible was reached.

What Insurers Should Watch

These regulations introduce more specificity regarding the scope, timing, and application of hurricane deductibles—clarity that benefits both insurers and policyholders.

Historically, insurers could only request hurricane deductibles for properties in four boroughs (Bronx, Kings, Queens, and Richmond), and Nassau, Suffolk, and Westchester counties. Beginning February 2, 2026, insurers may begin to request to the DFS that it apply hurricane deductibles on any property anywhere in New York State, a potentially substantial expansion.

Key areas to monitor:

• Will insurers seek to apply hurricane deductibles statewide?
• If so, how will this affect premiums, risk distribution, and underwriting appetite?
• Will the new definitions and timing provisions lead to disputes over which deductible applies?

As insurers revise forms and filings to comply with these rules, additional operational and legal issues are likely to emerge.

Chartwell’s insurance coverage team is closely tracking these developments and advising carriers on compliance, policy revisions, claims handling implications, and anticipated litigation risks. If you have questions about these new hurricane deductible regulations or need assistance updating policy language or filings, please reach out.