Some insureds may have noticed a “windstorm deductible” or a “named storm” deductible on their insurance policy. What does “named storm” mean in the context of insurance?
Generally, both the “windstorm” and “named storm” deductible apply to insurance coverage for hurricanes. A hurricane is declared, or named, by the National Weather Service or U.S. National Hurricane Center. A “named storm” is broader and applies to hurricanes, typhoons, tropical storms, or cyclones which have been declared and namedby the U.S. National Weather Service, the U.S. National Hurricane Center or the U.S. National Oceanic and Atmosphere Administration (like Super Storm Sandy which was not a hurricane but caused quite a lot of damage).
Why is there a higher insurance deductible for hurricanes and named storms?
The deductible is the share of the repair costs borne by the consumer. Since the risk of hurricanes is higher in some areas than others, the insurance industry places a larger burden on those homeowners in order to keep the premium costs lower for everyone. This strategy was put into place in 1992 after Hurricane Andrew devasted the southern coasts of the US and cost insurers billions of dollars. In order to mitigate these costs, the insurance industry adjusted the deductibles for hurricane claims.
What about winter storms? We had Winter Storm Riley last year and Winter Storm Harper this year. Do those count as named storms for insurance?
No. Those storms are named by the Weather Channel and other media outlets to help in identifying and reporting on them. These are not considered “named storms” on your insurance policy and any damage they cause will have the normal deductible.
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