Louisiana’s Annual Deductible Law (Louisiana Revised Statute Title 22, Section 1337) protects homeowners from paying a full hurricane deductible for every damage-causing storm that strikes in a single season.
A hurricane deductible is a specific out-of-pocket cost — often 2% to 5% of your home's total insured value — that you must pay before your insurance coverage kicks in to help pay for storm damage. By capping this amount each calendar year, the law helps homeowners avoid multiple high-cost deductibles if Louisiana is hit by back-to-back hurricanes.
What is the Louisiana single hurricane deductible law?
Often referred to as the Annual Deductible Law, La. R.S. § 22:1337 can help reduce homeowners’ financial burden in the wake of covered storm damage if multiple named storms or hurricanes damage their property within a single hurricane season. The law was passed in 2009 after Hurricanes Katrina and Rita (2005) and Gustav and Ike (2008) showed how multiple deductibles could bankrupt homeowners.
Under R.S. § 22:1337, any separate deductible applied to hurricane damage can only be applied annually — that is, it can't be reset each time you need to make a claim related to a named storm or hurricane. The law applies only to one- or two-family owner-occupied properties.
How the annual deductible works in practice
With the Annual Deductible Law in place, homeowners in Louisiana only need to pay a separate deductible for hurricane damage once per calendar year.
If two or more named storms hit in the same hurricane season and cause substantial damage to your property, your deductible won’t reset for each individual claim. Instead, the “Remaining Balance Rule” states that the insurer can only charge a deductible equal to whatever portion of your storm deductible you haven’t met yet.
For example:
- Let’s say your home is insured for $350,000 with a 2% hurricane deductible. Your insurance company can’t charge more than $7,000 over the course of the year for claims associated with a named storm or hurricane.
- In July, Storm A causes $4,000 in damage to your home, which you pay out of pocket. $3,000 of your deductible remains.
- In September, Storm B destroys your roof, causing $12,000 in total damage. You’ll only pay the remaining $3,000 of your hurricane deductible; your insurer will cover the rest of the damage, up to your policy limit.
One key exception: If your hurricane or named storm deductible was fully satisfied, or if there is a remaining balance that is less than the standard deductible that applies to your home insurance for all perils, your insurer can charge the higher amount instead.
- Let’s say you paid $6,000 out of pocket in July, leaving you with a balance of just $1,000. If your standard home insurance deductible is $2,000, your insurer could charge you $2,000 on the claim for Storm B.
Hurricane vs. named storm vs. wind and hail deductibles
The one-per-year deductible law applies only to hurricanes and named storms. Losses that result from regular thunderstorms or other weather events that are not a named storm or hurricane are not subject to calendar-year requirements.
- Hurricane deductible: This type of deductible is triggered when your property is damaged by a storm system that the National Hurricane Center (a division of the National Weather Service) has declared a hurricane.
- Named storm deductible: This type of deductible is triggered when your property is damaged by a storm system that the National Hurricane Center has declared a named storm, such as a tropical storm.
- Wind and hail deductible: This deductible may be applied to damage from any wind event, even if it’s not named. The one-per-year limitation does not apply in these instances.
Every insurer handles storm deductibles differently, so check your policy or speak with your insurer to see which type(s) of separate deductibles apply to your coverage.
Key exceptions and fine print to watch for
Louisiana’s Annual Deductible Law uses specific fine print to regulate the use of annual deductibles.
- Authorized insurers: This term refers to insurance carriers authorized, or “admitted,” to do business in the state of Louisiana. It’s worth noting that “surplus lines” carriers are not authorized and therefore might not be bound by this statute. Check your policy declarations page to find out if your insurer is authorized.
- Calendar year: The bill specifically limits insurers’ ability to charge the full amount of your hurricane or named storm deductible more than once in a calendar year — not within a single hurricane season. The law (and your deductible) reset each year on January 1, not when hurricane season ends in November.
- Requirement to maintain records: The law specifies that insurers can demand receipts or other records of loss to prove that your deductible has already been met or partially met.
What happens if I switch insurance companies?
If you switch insurance companies, you could risk resetting your hurricane deductible.
The Annual Deductible Law is designed to prevent a single insurer from applying a storm deductible multiple times per calendar year. But different insurers mean different deductibles.
Let’s turn to another example:
- Your home is insured for $350,000 with Insurer A, subject to a 2% hurricane deductible (a total of $7,000).
- When Hurricane Amelia hits in July, ripping the siding off your home and crushing a portion of the roof, you pay your storm deductible in full, leaving Insurer A to cover the remaining $15,000 of damage.
- Desperate to save money after the $7,000 hit to your bank account, you switch to Insurer B in August for a lower rate. Your coverage is the same: $350,000 in dwelling coverage, with a 2% hurricane deductible.
- Later that month, Tropical Storm Barnabas swings through town and destroys your garage door and several windows. You file a claim with Insurer B for the $10,000 in damage, but find that you’re expected to pay your full $7,000 deductible again.
If you’re considering switching insurers mid-year following a hurricane or named storm claim, think seriously about the risk of resetting your deductible.
Frequently asked questions
Do I have to pay my standard deductible for the second storm?
If your home is damaged by multiple hurricanes or named storms in a single calendar year, Louisiana law allows insurers to charge you either the remaining balance of your separate storm deductible (that is, whatever portion you didn’t pay after the first storm), or your standard “all perils” deductible — whichever is greater. If your hurricane deductible is fully met, you’ll only pay your standard deductible for the rest of the year.
Does the one-per-year rule apply to flood insurance?
The one-per-year deductible rule only applies to homeowners insurance with separate deductibles for named storms and hurricanes. Flood insurance administered by FEMA through the National Flood Insurance Program typically has its own deductible rules. However, if you added a flood endorsement to your homeowners coverage or purchased a separate flood insurance policy and the flooding is a result of a hurricane or named storm, the annual deductible may apply to the flood-related damage. Check with your flood insurance provider for details.
How do I know if my insurer is an "authorized insurer"?
You can check whether your insurer is an “authorized insurer” in the state of Louisiana by entering the company’s name or NAIC number on the Louisiana Department of Insurance website. You’ll find this information on your policy’s declarations page. If your insurer is authorized, you’ll see “Admitted Insurer” under the “License Type(s)” field.
What if my first storm claim was less than my deductible amount?
If your first storm claim was less than your deductible or you chose not to file a claim, the repair costs you paid out of pocket may still count toward meeting your annual hurricane deductible, provided the damage was caused by a hurricane or named storm and you have documentation of all costs.
Does this law apply to commercial property?
La. R.S. § 22:1337 only applies to one- or two-family owner-occupied dwellings in Louisiana. However, a similar law pertaining to commercial properties with a value of less than $20 million — La. R.S. §22:1267.1 — took effect in 2023.
