August 22, 2023

An In-Depth Guide to Hurricane Insurance Deductibles and Coverage in Louisiana

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As a resident of Louisiana, it’s crucial to understand the intricacies of hurricane insurance coverage. In this comprehensive guide, we will provide extensive insights into hurricane insurance deductibles and coverage in Louisiana, helping you to navigate this complex subject with ease.

Understanding Hurricanes in Louisiana

Hurricanes are a common occurrence in Louisiana, with the state ranking fourth in the US for hurricanes making landfall. On average, Louisiana experiences a hurricane once every three years, causing significant damage and destruction1. The hurricane season typically begins on June 1 and ends on November 302. During this period, Louisiana residents must remain vigilant and prepared for any potential hurricane threats.

The Need for Hurricane Insurance

Since hurricanes are a frequent threat in Louisiana, homeowners must ensure they have adequate insurance coverage to protect their properties. Standard homeowners insurance policies usually do not cover damage resulting from heavy rain or storm surge associated with hurricanes3. Therefore, Louisiana residents often need separate hurricane insurance to cover potential storm damages.

Louisiana’s Named-Storm Deductible Legislation

To protect homeowners from having to pay multiple deductibles for hurricane damage within a single year, Louisiana enacted a named storm deductible statute in 20094. Under this law, the deductibles applied to homeowners’ insurance for named-storms, hurricanes, wind, and hail damage are calculated on an annual basis. This means that if a homeowner incurs damages from multiple named storms in one calendar year, the insurance provider can only apply the deductible once, or in some cases, the remaining amount of the deductible for the subsequent storms5.

Practical Application of the Law

The application of the named storm deductible law can be beneficial for policyholders who experience multiple storm damages in a single year. For example, if a homeowner files a claim for hurricane damage and meets the named storm deductible, they may not have to pay the deductible again for damages from subsequent storms within the same year6. However, the specific terms and conditions of the insurance policy will ultimately determine the application of the deductible7.

Interpretation for Insurance Providers

This law applies to policies issued or renewed by authorized insurers on or after January 1, 20108. Authorized insurers are defined as those with a certificate of authority or license issued under the provisions of this code or qualified under Louisiana’s Risk Retention Group Law9. Unauthorized insurers, more commonly referred to as Surplus Lines Carriers, are not bound by this law and can assess separate named storm deductibles for each loss10.

The Role of a Knowledgeable Hurricane Attorney

A knowledgeable hurricane attorney can provide invaluable assistance in understanding and interpreting hurricane insurance policies and the associated deductible laws. They can help policyholders review their insurance policies, evaluate the application of deductibles, and ensure fair treatment during the claims process11. Furthermore, they can hold insurance companies accountable and focus on maximizing the recovery for the policyholder12.

How to Prepare for Hurricane Season

To mitigate the impact of a hurricane, homeowners can take the following steps:

  1. Purchase flood insurance: Since standard homeowners insurance doesn’t cover flood damage, it’s important to secure a separate flood insurance policy13.
  2. Review your insurance coverage: Make sure you fully understand the details of your insurance policy, including any named storm or hurricane deductibles14.
  3. Update your home inventory: Documenting your possessions can streamline the claims process in the event of property damage or loss15.
  4. Make an evacuation plan: Having copies of your policies and your agent’s contact information can help speed up the claims process if your home is damaged in a storm16.

Understanding Your Insurance Coverage

Understanding the specifics of your insurance coverage can be complex. Special deductibles may apply to claims resulting from hurricane damage, and these deductibles often replace the regular homeowner’s insurance deductible amounts17. The exact amount of the deductible can vary and is usually outlined in the insurance policy. Typically, the deductible can range from 2-5% of the home’s insured value18.

How Hurricane Deductibles Work

To illustrate how hurricane deductibles work, consider the following example: You have a home with an insured value of $200,000 and a hurricane deductible of 3%. This equates to a $6,000 deductible. If a named hurricane strikes and you sustain $20,000 in damages, the $6,000 deductible applies. Consequently, you would receive compensation of $14,000, which is the total damage amount minus the deductible19.

It’s also important to note that the hurricane deductible applies on an annual basis. Therefore, if you suffer damages from two or more hurricanes in a single year, you can total your losses and apply the deductible once20.

Conclusion

In conclusion, understanding hurricane insurance deductibles and coverage in Louisiana is crucial for homeowners in the state. Given the complexities of this subject, it’s advisable to consult with a knowledgeable hurricane attorney to ensure you receive fair treatment during the claims process. As always, preparation and understanding are key to navigating hurricane season in Louisiana.

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