What You Need to Know About Louisiana Hurricane Insurance

Category: Personal Insurance

The National Oceanic and Atmospheric Administration (NOAA) recently predicted a near-normal or below-normal 2014 Atlantic hurricane season. NOAA predicts 8 to 13 named storms, with three to six becoming hurricanes, and one or two becoming major hurricanes.

While the projections are for a normal to mild season, there is no reason to ignore your hurricane preparations. According to the Insurance Information Institute, 5 of the 11 most hurricane-prone counties in the U.S. are in Louisiana. One of the most important things Louisiana residents can do at the start of each hurricane season is to review your homeowners insurance and make sure that you have appropriate coverage for hurricane-related damage.

Insurance experts recommend that coastal residents do a complete insurance checkup at the beginning of hurricane season. If you live in a hurricane-prone area, your homeowners insurance likely includes a hurricane deductible. A hurricane deductible is separate from your primary home insurance deductible, and is a percentage of your home’s insured value, rather than a pre-determined flat dollar figure. Only 18 states allow for hurricane deductibles, and Louisiana is one of them.

Hurricane deductibles apply only when your home has been damaged by a hurricane. They are typically 1% to 5% of the home’s insured value, so if your home is insured for $250,000 and you have a 2% hurricane deductible, you would have to pay the first $6,250 to repair damage to your home before your insurance coverage kicks in.

Hurricane deductibles are subject to a “coverage trigger.” This means that the hurricane deductible will only apply if that trigger comes into play. The trigger may be when the National Weather Service declares a hurricane watch or warning, officially names a tropical storm, or defines a storm’s intensity. You must review your policy to know what your hurricane deductible trigger is.

Louisiana Insurance Commissioner James Donelon released on May 30, 2014 a notice encouraging Louisiana residents to prepare for hurricane season by reviewing insurance coverage and deductibles, taking a home inventory, and assessing their need for flood insurance.

In addition to recommending that residents review any separate wind, hail, and named-storm or hurricane deductibles, Commissioner Donelon reminds residents that losses due to flooding are not covered under your homeowners insurance policy, even if the flooding is caused by a hurricane.

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