Named Storm Deductible
A special, typically higher deductible that applies specifically to damage caused by hurricanes and other major storms that have been officially named by the National Weather Service. This deductible is usually calculated as a percentage of the home's insured value rather than a flat dollar amount.
Example
“When Hurricane Maria caused $20,000 in damage to Lisa's home, she was shocked to learn her named storm deductible was 5% of her home's $300,000 insured value, meaning she owed $15,000 instead of her regular $1,000 deductible.”
Memory Tip
Remember 'Big NAME = Big GAME' - when a storm is big enough to get a name, your deductible becomes a bigger game with higher stakes.
Why It Matters
Named storm deductibles can cost homeowners thousands more than regular deductibles, often ranging from 1-10% of home value. Coastal residents especially need to budget for these higher out-of-pocket costs during hurricane season.
Common Misconception
Many homeowners think their regular deductible applies to all weather events and are unaware they have a separate, much higher deductible for named storms. Some also mistakenly believe the named storm deductible only applies to hurricanes, when it often includes other named weather events like tropical storms.
In Practice
Mike lives in Florida and has a $400,000 home with a standard $1,000 deductible and a 2% named storm deductible. When Tropical Storm Eta causes $25,000 in damage, Mike must pay $8,000 (2% of $400,000) out of pocket before insurance covers the remaining $17,000. If the same damage occurred from a regular thunderstorm, he would only pay his $1,000 standard deductible, saving him $7,000.
Etymology
The term emerged in the 1990s when insurance companies began implementing special deductibles for named storms following costly hurricane seasons, combining the meteorological practice of 'naming' storms with insurance 'deductible' terminology.
Common Misspellings
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Related Terms
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