Date: July 2018

Application of Separate Named Storm or Hurricane Deductible Clarified

On June 20, 2018, Louisiana Department of Insurance (“Department”) issued Advisory Letter Number 2018-01 specifically addressing the application of separate named storm deductibles with respect to named subtropical storm.

Under La. R.S. 22:1337, insurers issuing homeowners insurance or insurance on one or two family owner occupied premises that use a separate deductible to be applied in place of other deductible to loss or damage resulting from a named storm or hurricane must apply that separate deductible on an annual basis to all named storms or hurricane losses occurring during a calendar year. Under La. R.S. 22:1337(A)(2), a named storm is defined as a storm system that has been declared a named storm by the National Hurricane Center of the National Weather Service. The question apparently has arisen with respect to subtropical systems that receive a name from the National Hurricane Center of the National Weather Service but are not deemed tropical storms or hurricanes. Are losses and damages resulting from such a named storm, subject to the separate deductible rules? The answer may depend upon the exact language in the policy. If the language tracks La. R.S. 22:1337(A)(2) as set forth above, then the operative trigger is whether the storm system is assigned a name by the National Hurricane Center of the National Weather Service, regardless of whether it is classified as a subtropical storm, a tropical storm or a hurricane.

On the other hand, if the language in the separate deductible applies to a storm system declared by the National Hurricane Center or National Weather Service to be a tropical storm or a hurricane, then the deductible only applies if the storm system is classified as a tropical storm or a hurricane, even though it has been granted a name. In such case, if the storm system is classified as a subtropical storm, although named, the separate deductible would not be triggered. Consequently, recourse must be to the precise policy language along with the provisions of La. R.S. 22:1337.

Date: July 2018

Application of Separate Named Storm or Hurricane Deductible Clarified

On June 20, 2018, Louisiana Department of Insurance (“Department”) issued Advisory Letter Number 2018-01 specifically addressing the application of separate named storm deductibles with respect to named subtropical storm.

Under La. R.S. 22:1337, insurers issuing homeowners insurance or insurance on one or two family owner occupied premises that use a separate deductible to be applied in place of other deductible to loss or damage resulting from a named storm or hurricane must apply that separate deductible on an annual basis to all named storms or hurricane losses occurring during a calendar year. Under La. R.S. 22:1337(A)(2), a named storm is defined as a storm system that has been declared a named storm by the National Hurricane Center of the National Weather Service. The question apparently has arisen with respect to subtropical systems that receive a name from the National Hurricane Center of the National Weather Service but are not deemed tropical storms or hurricanes. Are losses and damages resulting from such a named storm, subject to the separate deductible rules? The answer may depend upon the exact language in the policy. If the language tracks La. R.S. 22:1337(A)(2) as set forth above, then the operative trigger is whether the storm system is assigned a name by the National Hurricane Center of the National Weather Service, regardless of whether it is classified as a subtropical storm, a tropical storm or a hurricane.

On the other hand, if the language in the separate deductible applies to a storm system declared by the National Hurricane Center or National Weather Service to be a tropical storm or a hurricane, then the deductible only applies if the storm system is classified as a tropical storm or a hurricane, even though it has been granted a name. In such case, if the storm system is classified as a subtropical storm, although named, the separate deductible would not be triggered. Consequently, recourse must be to the precise policy language along with the provisions of La. R.S. 22:1337.

Date: July 2018

Application of Separate Named Storm or Hurricane Deductible Clarified

On June 20, 2018, Louisiana Department of Insurance (“Department”) issued Advisory Letter Number 2018-01 specifically addressing the application of separate named storm deductibles with respect to named subtropical storm.

Under La. R.S. 22:1337, insurers issuing homeowners insurance or insurance on one or two family owner occupied premises that use a separate deductible to be applied in place of other deductible to loss or damage resulting from a named storm or hurricane must apply that separate deductible on an annual basis to all named storms or hurricane losses occurring during a calendar year. Under La. R.S. 22:1337(A)(2), a named storm is defined as a storm system that has been declared a named storm by the National Hurricane Center of the National Weather Service. The question apparently has arisen with respect to subtropical systems that receive a name from the National Hurricane Center of the National Weather Service but are not deemed tropical storms or hurricanes. Are losses and damages resulting from such a named storm, subject to the separate deductible rules? The answer may depend upon the exact language in the policy. If the language tracks La. R.S. 22:1337(A)(2) as set forth above, then the operative trigger is whether the storm system is assigned a name by the National Hurricane Center of the National Weather Service, regardless of whether it is classified as a subtropical storm, a tropical storm or a hurricane.

On the other hand, if the language in the separate deductible applies to a storm system declared by the National Hurricane Center or National Weather Service to be a tropical storm or a hurricane, then the deductible only applies if the storm system is classified as a tropical storm or a hurricane, even though it has been granted a name. In such case, if the storm system is classified as a subtropical storm, although named, the separate deductible would not be triggered. Consequently, recourse must be to the precise policy language along with the provisions of La. R.S. 22:1337.

Date: July 2018

Application of Separate Named Storm or Hurricane Deductible Clarified

On June 20, 2018, Louisiana Department of Insurance (“Department”) issued Advisory Letter Number 2018-01 specifically addressing the application of separate named storm deductibles with respect to named subtropical storm.

Under La. R.S. 22:1337, insurers issuing homeowners insurance or insurance on one or two family owner occupied premises that use a separate deductible to be applied in place of other deductible to loss or damage resulting from a named storm or hurricane must apply that separate deductible on an annual basis to all named storms or hurricane losses occurring during a calendar year. Under La. R.S. 22:1337(A)(2), a named storm is defined as a storm system that has been declared a named storm by the National Hurricane Center of the National Weather Service. The question apparently has arisen with respect to subtropical systems that receive a name from the National Hurricane Center of the National Weather Service but are not deemed tropical storms or hurricanes. Are losses and damages resulting from such a named storm, subject to the separate deductible rules? The answer may depend upon the exact language in the policy. If the language tracks La. R.S. 22:1337(A)(2) as set forth above, then the operative trigger is whether the storm system is assigned a name by the National Hurricane Center of the National Weather Service, regardless of whether it is classified as a subtropical storm, a tropical storm or a hurricane.

On the other hand, if the language in the separate deductible applies to a storm system declared by the National Hurricane Center or National Weather Service to be a tropical storm or a hurricane, then the deductible only applies if the storm system is classified as a tropical storm or a hurricane, even though it has been granted a name. In such case, if the storm system is classified as a subtropical storm, although named, the separate deductible would not be triggered. Consequently, recourse must be to the precise policy language along with the provisions of La. R.S. 22:1337.

Date: July 2018

Application of Separate Named Storm or Hurricane Deductible Clarified

On June 20, 2018, Louisiana Department of Insurance (“Department”) issued Advisory Letter Number 2018-01 specifically addressing the application of separate named storm deductibles with respect to named subtropical storm.

Under La. R.S. 22:1337, insurers issuing homeowners insurance or insurance on one or two family owner occupied premises that use a separate deductible to be applied in place of other deductible to loss or damage resulting from a named storm or hurricane must apply that separate deductible on an annual basis to all named storms or hurricane losses occurring during a calendar year. Under La. R.S. 22:1337(A)(2), a named storm is defined as a storm system that has been declared a named storm by the National Hurricane Center of the National Weather Service. The question apparently has arisen with respect to subtropical systems that receive a name from the National Hurricane Center of the National Weather Service but are not deemed tropical storms or hurricanes. Are losses and damages resulting from such a named storm, subject to the separate deductible rules? The answer may depend upon the exact language in the policy. If the language tracks La. R.S. 22:1337(A)(2) as set forth above, then the operative trigger is whether the storm system is assigned a name by the National Hurricane Center of the National Weather Service, regardless of whether it is classified as a subtropical storm, a tropical storm or a hurricane.

On the other hand, if the language in the separate deductible applies to a storm system declared by the National Hurricane Center or National Weather Service to be a tropical storm or a hurricane, then the deductible only applies if the storm system is classified as a tropical storm or a hurricane, even though it has been granted a name. In such case, if the storm system is classified as a subtropical storm, although named, the separate deductible would not be triggered. Consequently, recourse must be to the precise policy language along with the provisions of La. R.S. 22:1337.