Hurricanes and other storms can devastate anyone – even those with homes far from the coast. Due to the amount of damage they can cause, insurance providers often utilize “named storm deductibles” to provide coverage. These deductibles are higher than traditional ones; however, they are only triggered by specific conditions and fluctuate by location. It’s helpful to understand these conditions in case you experience a loss.

What is a Named Storm?

The National Weather Service (NWS) started naming storms to help the public track and follow them. Other organizations, like The Weather Channel, have begun to name storms as well. That being said, insurance providers only apply named storm deductibles to storms named by the NWS. The most common named storms are hurricanes, tropical depressions, and tropical storms.

Deductible Triggers

The conditions that trigger named storm deductibles can vary by provider and location. However, most providers include time limits like 24 hours before and 48 hours after a named storm. During this window, the named storm deductible applies instead of your standard deductible. Other circumstances may include the timing of landfall or when a storm watch is declared. Since the technicalities of your named storm deductible may vary, it’s essential to understand the exact rules that apply to your state and policy.

Price Differences

Named storm deductibles are generally based on a percentage rather than a dollar amount. The rate typically ranges from 1-5% of the insured amount but can reach as high as 10% in high-risk areas.

For instance, let’s say your home is insured for $500K, and you experience damage from wind. If the loss occurs during an ordinary storm, you will pay towards your fixed-dollar deductible before your insurance coverage would kick in. However, if the damage occurred during the time window of a named storm, your deductible would be calculated based on your named storm deductible percentage. With a 5% deductible, you would be responsible for $25K before insurance would pay towards damages.

What it Means for You

Insurance providers have structured these named storm deductibles to keep premiums relatively low. However, the key takeaway is that the best defense is a strong offense. Take proactive steps long before a storm is named to avoid damage. For more information on homeowners insurance or for tips to help you to protect your home from severe storms, contact us at 908.879.6500 today.