The Named Storm Deductible
Homeowners filing claims for damage caused by Hurricane Gustav may be in for a surprise: the so-called “named storm deductible.” Recently authorized by the Louisiana Legislature, a new state law permits insurance companies to implement deductibles of as much as four percent (4%) of the value of the insured property which is specifically applicable to damage caused by named storms such as tropical storms and hurricanes. While common in every other state, this is a new development in Louisiana insurance law.
A named storm deductible of, for example, four percent (4%) on a home with an insured value of $150,000, would mean that, with respect to loss caused by Hurricane Gustav, a homeowner’s deductible would be $6,000, rather than the standard $500 or $1,000 deductible customarily applicable to other types of losses.
Similar named storm deductibles have been included in commercial and other property insurance policies for some time, and commercial named storm deductibles can rise as high as ten percent (10%) or fifteen percent (15%) of the insured property value.
Check with your insurance agent or insurance company to determine whether your homeowners or commercial policy has a named storm deductible. These types of changes are typically added to a policy at renewal, and you should have received written notification of this modification to your policy from your insurance company.