Understanding Named Storm Deductibles During Tropical Storm Bertha

Tropical Storm Bertha, evolving from Tropical Depression Two on Monday, poses significant threats of heavy rainfall and storm surge to U.S. coastal areas.

In June, Tropical Storm Arthur illustrated that severe weather impacts, such as New Orleans roof damage from tornadoes, can occur without a hurricane classification. Policyholders should be aware that named storms activate specific deductibles under their insurance policies.

According to Stephen Lovecchio, a principal at TWFG Insurance, standard property insurance deductibles typically range from $1,000 to $5,000, different from those applied to wind-hail or named storm events. Louisiana Insurance Commissioner Tim Temple noted that named storm deductibles require policyholders to pay out-of-pocket before insurance covers damages from tropical storms or hurricanes.

With Tropical Storm Bertha's emergence, these named storm deductibles are likely applicable under current homeowners policies. Generally, in Louisiana, these deductibles range from 2% to 5% of a home's insured value. For example, on a $200,000 insured property with a 3% hurricane deductible, homeowners would pay $6,000 before insurance coverage kicks in.

Flood insurance differs, as the National Flood Insurance Program and private flood insurers do not employ named storm deductibles, instead using distinct flood-related deductibles. Lovecchio clarified that the wind-hail deductible generally covers damages from any tropical depression or severe weather, such as tornadoes or hailstorms, with single policies typically including either a wind-hail, named storm, or hurricane deductible.

Lovecchio mentioned the timing of weather events can influence deductible applications, with post-storm incidents possibly falling under hurricane deductibles for a period following the storm. Disputes may occur if claimants contend subsequent damages aren't storm-related.

Insurance experts stress the importance of understanding policy details before severe weather strikes. Lovecchio emphasized that deductible changes generally aren't possible during hurricane season unless during policy renewal. Commissioner Temple advises residents to assemble emergency kits, maintain properties, and document possessions to facilitate potential claims processes.