A content creator recently went viral on TikTok after she and her husband made the bold claim that windstorm insurance is a big scam.
Bunny Hedaya (@bunnyhedaya) and her husband Harry, an entrepreneur in the Tampa Bay area, explained that insurance won’t necessarily save or help homeowners who experienced property damage as a result of Hurricane Milton.
“People think that when you have insurance after a hurricane that you get to just build a new house,” Bunny said. She then turned to her husband, who remained off-camera. “I would really like you to explain how insurance works,” she asked him.
As of Sunday morning, their clip had amassed more than 1.5 million views.
Why is windstorm insurance a scam?
Harry didn’t mince words as he ripped into windstorm insurance.
“Start off by substituting the word ‘insurance’ for ‘gotcha,’” he said.
Windstorm and flood insurance, he said, are “two separate animals and the lines between them sometimes get blurred depending on the nature of the storm.” He clarified, too, that some homeowners can have windstorm insurance without flood insurance, or vice-versa.
If you have a mortgage, he said, you have to buy both. But if you own a home, you technically don’t have to get it insured (something Harry said that he didn’t recommend).
“Let’s just say windstorm and flood are mandatory,” he continued. “The problem with windstorm is [that] the chances of your house being damaged by a hurricane or a windstorm is about the same as a tornado going through your neighborhood.” In other words, he said, you have to be right in the middle of the worst winds to get severe windstorm damage.
He also said that windstorm insurance comes with a high deductible.
“What a lot of people don’t realize is that deductible is based on the replacement value of your house,” he said. So, if the insurance company decided that it cost $80,000 to replace your house, and you have a 10% deductible on windstorm insurance, homeowners would be expected to pay “$80,000… before the insurance company is even going to pay a penny.”
“So not only do you have to live in the eye of a tornado,” Harry concluded, “but you have to pay $80,000 to benefit from your windstorm policy.”
@bunnyhedaya @Rich Mom Rich Dad Podcast ♬ original sound – BUNNY 🐰
What is windstorm insurance—and do you need it?
According to the U.S. News & World Report, there are 19 states with some sort of windstorm insurance requirement. This policy, it said, doesn’t cover water-related damages as a result of a storm; instead, most standard policies include coverage for wind. Because of this, most homeowners in storm-prone areas need to buy both windstorm and flood insurance.
Though wind insurance policy costs vary by state, a standard policy in Florida costs an average of $5,527 per year for $300,000 in dwelling coverage, according to Bankrate. It noted that costs could vary throughout the state, as homeowners in Miami might pay almost double for the same policy.
Viewers are torn
Some of the top-liked comments on Hedaya’s video said that they agreed with her husband’s analysis of the various insurance policies.
“Insurance is the biggest scam and they literally do everythingggg to not give you money,” one woman wrote.
“America is the land of the over insured and nothing is covered,” another added.
A third commenter, who said she was an insurance agent, said she wholeheartedly agreed with Harry.
“As an insurance agent, I approve of this message,” she wrote.
But some others pointed out that their deductibles aren’t nearly as high as what Harry said and that, if confronted by a storm, they wouldn’t have to pay the high $80,000 amount up-front as he claimed.
“Average person [pays] a 2% deductible. In my case 8k not 80k,” one man said.
“While I hate insurance, and pay a lot for our excellent coverage, our deductible is only 2,000,” another woman shared.
“10% deductible is the highest deductible you can pick,” another viewer noted. “Majority of people I know have 2% or 5%.”
The Daily Dot has reached out to Hedaya via TikTok comment.
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