WEST MONROE, LA (KTVE/KARD)– If you had damage to your home from Hurricane Laura, you might have noticed your deductible has gone up significantly. The rise in the deductible isn’t a scam but rather a “Hurricane Deductible”. Many may be wondering why we have these “Named Storm Deductibles” as they may put some residents in a very hard spot. Insurance officials say “after Hurricane Andrew in 1992, insurers realized that losses from hurricanes could be much higher than they had previously thought. Hurricane Katrina, in 2005, which cost insurers more than $41 billion at the time, confirmed their fears.” After these losses, the hurricane and windstorm deductibles were formed.

In the history of Louisiana, a category one hurricane has never hit the northern part of the state, until last Thursday. For the first time, “Named Storm Deductibles” have brought a surprise to many residents’ wallets.

“It’s important for people to know their policy, what is covered and these things about deductibles,” said Bill Davis, Insurance Information Institute.

Named Storm Deductibles are activated when the National Hurricane Center reports winds of 39 miles per hour. Hurricane Deductibles are activated when winds reach 74 miles per hour. The Insurance Information Institute (III) says these deductibles are based on a percentage, not a specific number, like a standard 500 dollar deductible.

“The percentage is applied to the insured value of the home. So, if you have a 5% deductible on a $300,000 home, then $15,000 would be the amount of the deductible holder would be responsible for before the insurance policy would kick in,” said Davis.

Every insurance company has a “Named Storm Deductible” percentage set in place, despite the damage in the area. That percentage can change depending on the insurance company you use, usually ranging from 1 to 5 percent.

“All of these Hurricane Deductibles have to be approved by the State Insurance Department in the given state,” said Davis.

The good news, officials say insurers generally can not increase the “Named Storm Deductible” on homeowner policies that have been in effect for more than three years. In addition, insurers can’t impose hurricane deductibles more than once during a hurricane season, which is June 1 to November 30th. Officials say this is the perfect time to learn about your insurance policy.

“If they have questions they need to talk to their insurance agents or insurance company about them,” said Davis.

According to State Farm, Louisiana has almost 28,000 total claims filed for damaged homes and over 4,000 auto claims. To see more information about these types of deductibles, click here.