How “Named Storm” Deductibles Work for Insurance Claims

Once a storm has a name – like Hurricane Milton or Hurricane Helene, it can significantly change future insurance claims related to that storm. You may have to pay a “named storm deductible,” for example, instead of your usual deductible.

Keep reading to find out everything you need to know about how named storm deductibles work for insurance claims.

How Named Storm Deductibles Work

Named storms can change the way deductibles work.

Typically, your insurance policy has a standard deductible – say, between $500 and $1,500 per claim. This is the amount you are responsible for paying for a claim before insurance coverage applies.

Once a storm is named, however, you may need to pay a named storm deductible for any claim related to that storm. Also sometimes referred to as a hurricane deductible, a named storm deductible can be significantly higher than your ordinary deductible.

Here’s how named storm deductibles work:

• Once a storm has a name – like a named hurricane – it triggers the named storm deductible part of your claim.
• This deductible is different from your ordinary deductible.
• Your ordinary deductible is typically a fixed amount between $500 and $2,500. You pay this deductible when making a claim (or, the deductible gets subtracted from your final payout).
• A named storm deductible, however, is typically a fluctuating cost: it’s a percentage of the property’s value.
• A typical named storm deductible, for example, is between 1% and 10% of the value of the insured home.

Let’s say a named hurricane is approaching your property. Your property is worth $500,000 and your insurance policy has a named storm deductible of 5% of the property’s value. If your home is destroyed, then your insurer could cover the full cost of replacing your home minus a deductible of $25,000 (5% of $500,000). You could receive payment from your insurer for the full value of your policy minus the named storm deductible ($475,000 total).

What Are Named Storms?

In the vast majority of cases, named storm deductibles apply to hurricanes.

When the National Weather Service (NWS) or National Hurricane Center (NHC) declare a hurricane, for example, they attach a name to that hurricane.

The NWS started naming hurricanes in 1953. The NWS tracks a storm as it moves from a tropical depression into a tropical storm. Once the storm reaches a certain windspeed, it becomes a hurricane. As the hurricane picks up speed, it becomes a Category 1 to Category 5 hurricane, based on its highest recorded windspeed.

Named Storm Deductibles vs. Hurricane Deductibles

Some states refer to named storm deductibles as hurricane deductibles. The two terms are generally interchangeable.

Like named storm deductibles, hurricane deductibles generally require you to pay 1% to 10% of the value of your house before insurance covers the remaining payout.

Hurricane deductibles apply when the National Weather Service or National Hurricane Center has declared a storm a hurricane and given it a name.

Named Storm Deductibles Are Relatively New

Prior to 1992, the NWS and NHC named hurricanes – but the naming of the hurricane didn’t mean much. It was just a way to separate the hurricane from other severe weather events.

After Hurricane Andrew in 1992, however, insurers started to implement named storm deductibles. Insurers lost a lot of money with Hurricane Andrew, and named storm deductibles would help to avoid significant losses in the next major hurricane.

After Hurricane Katrina in 2005, according to the NAIC, named storm deductibles became increasingly common. The insurance industry lost $64 billion on Hurricane Katrina. More insurers updated policies with language referring to named storm deductibles.

Named Storm Deductibles Aren’t Found Everywhere

Each state has its own department of insurance and set of insurance laws. Named storm deductibles aren’t found in every state.

As of 2024, according to the NAIC, 19 states have some type of hurricane deductible or named storm deductible. Those states include Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas and Virginia.

How Hurricanes Are Named

The National Weather Service (NWS) started naming hurricanes in 1953.

Hurricanes often arrive in groups, and hurricane-related damages may last for weeks. The NWS started naming hurricanes to distinguish different storms from one another. It makes it easier to track hurricanes and monitor the impact of specific storms – especially when one or more hurricanes form in rapid succession.

Here’s how the NWS names hurricanes:

• In 1953, the NWS started giving simple women’s names to hurricanes.
• In 1978, the NWS added men’s names to the system.
• The NWS maintains six lists of names. These lists are rotated every six years. Lists are written alphabetically.
• The NWS retires the names of devastating hurricanes out of respect for victims and survivors. This practice began in 1955 after hurricanes Carol, Edna, and Hazel caused significant damage across the northeastern United States.
• As of 2024, the NWS has retired 96 hurricane names. Since 2020, the organization has retired the names Laura, Eta, Iota, Ida, Fiona, and Ian.

It seems likely the NWS will also retire Hurricane Helene and Hurricane Milton, both of which caused devastating damage throughout the southeastern United States in late September and October 2024, respectively.

Do Named Storms Affect Insurance Coverage?

Once the NWS declares a storm to be a hurricane, it could impact your insurance coverage.

We’ve explained how named storms affect your deductible. However, they can also impact your coverage.

Some insurers require you to buy additional coverage for hurricanes, for example. Once a storm has been declared a hurricane and given a name, your insurer could exclude any damage caused by that storm unless you’ve purchased hurricane coverage or other additional coverages.

If you live in a state prone to hurricane damage – like parts of the southeastern United States – then a standard homeowners policy will generally include coverage for hurricanes. Many states in the region, for example, require insurers to bundle this coverage with a standard policy.

Final Word

What’s in a name? Once a hurricane is named, it changes things for insurers and policyholders.

A named hurricane requires you to pay a named storm deductible for a future claim. Instead of paying your standard deductible – say, around $500 to $2,500 – you could pay a special named storm deductible, also known as a hurricane deductible – of $20,000 or more (typically 1% to 10% of your home’s value).

For help managing a hurricane claim, contact a public adjuster. ClaimsMate’s public adjusters can help you navigate the complex hurricane insurance claim process – and avoid greedy insurance companies – to ensure you receive a fair payout. Schedule a no-cost consultation today.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.