ROCHESTER, N.Y. — Some home insurance companies handle named storms differently than unnamed storms, such as the recent nor’easter, even though both can cause significant damage.
First Alert Meteorologist Nate Morris had this question: “Why do home insurance companies treat named storms differently than unnamed storms?”
News10NBC’s Emily Putnam spoke with David Kirst, an insurance sales and operations manager with AAA of Western and Central New York. He explained that this practice began after major hurricanes like Katrina and Andrew.
“Insurance carriers were paying out so much money on a lot of those claims that they had to come up with a different way to kind of mitigate some of their losses. So they’ve come up with what they call their named storm exclusion. It’s not necessarily excluded, but what you may see on there is maybe a different deductible,” Kirst said.
A home insurance policy with a named storm exclusion can mean your deductible changes from a set dollar amount, often $1,000, to a percentage ranging from 2 to 10 percent. For example, if someone submits a claim on their $400,000 home with a 10 percent “named storm exclusion” deductible, they could end up paying $40,000 out of pocket.
Kirst said it is very uncommon to see this type of exclusion in policies in the Greater Rochester region because named storms rarely cause severe damage locally. Insurance companies sometimes refer to tornadoes or flooding as “catastrophic weather events,” which most policies will cover with the standard deductible.
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Good Question: Why do insurance companies treat named and unnamed storms differently? WHEC.com.
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