Our Positions | Hurricane Deductibles

Insurers operating in coastal states potentially subject to Atlantic storms use hurricane deductibles (as well as named-storm deductibles and windstorm deductibles) in recognition of the extent of their exposure to catastrophic losses. Such deductibles are based on a percentage of a home’s insured value rather than a flat dollar amount.

By limiting exposure to catastrophic losses, hurricane deductibles allow insurers greater flexibility, and at times, make it possible to offer coverage in hurricane prone areas to protect policyholders from extreme weather events as well as more ordinary claims. Hurricane deductibles, like any other provision in an insurance contract, are subject to regulatory approval, and several states have enacted laws and/or regulations addressing insurers’ use of such deductibles. Typical provisions of such measures include notice requirements and limitations on what circumstances can trigger the application of deductibles.

Hurricane deductibles have at times come under attack politically, and some lawmakers have sought to limit their use and effectiveness for political gain.

NAMIC Position

Insurers’ use of hurricane and other percentage deductibles should not be subject to undue legislative or regulatory restrictions. The applicability of hurricane deductibles should be determined solely by the contractual language of the policy rather than as the result of political pressures following a potentially triggering event. While some aspects of hurricane deductibles may be addressed through law or regulation, those should reflect the fact that hurricane damage can impact broad areas, even without actually making landfall. While overly restrictive regulation of hurricane deductibles may appear to be a political solution, the practical effect would be to reduce the availability and affordability of property/casualty insurance in disaster prone areas.

Florida: FLOIR Issues Guidance for Hurricane Preparedness, Response

July 2, 2020 In Informational Memorandum OIR-20-07M, the Florida Office of Insurance Regulation directs insurers to consider all aspects of their claim handling practices within their hurricane preparedness plans to ensure... Read more

Louisiana: NAMIC Continues Monitoring Tropical Storm Impact to Louisiana Coast

July 11, 2019 NAMIC reached out to the leadership of the House and Senate Insurance committees by email letter on July 10 advising them that NAMIC members continue to prepare for the impact of... Read more

South Carolina: Legislative Pre-Filing Underway

December 19, 2016 South Carolina legislators have pre-filed more than 500 bills in anticipation of the 2017 General Assembly, which convenes Jan. 10. Following is a list of pre-filed bills to date that relate to the property/casualty industry or involve... Read more

South Carolina: Named-Storm Deductibles, Tree Liability Discussed During Post-Matthew Town Hall Meeting

October 14, 2016 NAMIC attended a post-Matthew Town Hall meeting Oct. 14 in Beaufort that was called and hosted by state Rep. Shannon Erickson, specifically asked Insurance Director Ray Farmer to speak. Frank Sheppard of the Independent... Read more

Maryland: NAMIC Testifies for Deductible Clarification Bill

February 18, 2016 NAMIC testified before the House Economic Matters Committee on Feb. 18 in favor of HB 557 , a measure to clarify the use of specified underwriting standards that utilize a percentage deductible. The measure is aimed at solidifying what NAMIC believes wa... Read more


Jon Bergner
Vice President - Public Policy and Federal Affairs