Some tornado victims may have higher than expected deductibles

NEW ORLEANS (WVUE) – Many victims of this week’s tornadoes in Louisiana could face high insurance deductibles even though it was not a hurricane or named storm. Insurance agents say the damage could fall into a more expensive category for some policyholders.

The powerful twister left in splinter some houses on Tita Street in Algiers, a borough of New Orleans.

Catina Franklin’s house was one of them. She has insurance coverage. FOX 8 spoke to Franklin while waiting for her insurance adjuster to arrive.

“I hope there is enough coverage where I am able to return home,” Franklin said. “Right now I’m staying with a family member.”

Leonard Davis’ home is sandwiched between Franklin’s dilapidated home and another home that was also torn apart by the tornado. He did best.

“I have roof damage so it’s leaking water, all my fences have been destroyed, my porch and there’s debris from both houses,” Davis said.

But tornado victims should not assume that their Twister deductible is the same as the All Other Perils deductible.

A spokesman for the Louisiana Department of Insurance said policyholders need to check the declaration page of their policy because they may have a wind and hail deductible.

The deductible for wind and hail is usually higher than the deductible for AOPs.

Ross Fayard, owner of the Amstate Insurance Agency.

“Yes,” said Fayard. “A hail deductible, whether it’s 1%, 2%, 3%, 5%, it’s a percentage of coverage ‘A’, so yes, if your home is $300,000 or more and you have a $2,500 AOP deductible.” have, but you have a 3% wind deductible, that’s a $6,000 deductible because it’s a percentage of Coverage “A”.

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Insurance agents say that as more companies refuse to take out wind and hail policies, many people need to find separate coverage for them or policies with different categories of deductibles.

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“I think I want to say that over the past five years we’ve seen companies add a deductible for wind hail. I looked at a policy, I think the other day it was Occidental, it had three deductibles,” Fayard said. “They had an AOP deductible, AOP is all other perils, they had a named storm deductible, which is a hurricane, they had a named storm deductible, and then they had a wind hail deductible, so they definitely got hit.” “

Dan Burghardt Insurance says if someone has a wind and hail deductible, they must pay or meet the higher tornado damage deductible because it was a wind event.

Davis wasn’t sure what his deductible for the tornado was.

“No, I don’t know, I can’t answer it, but I suppose it’s a lot,” he said.

“I’m 100% for the people who I think should absolutely fall under the AOP deductible unless they have a hail deductible,” Fayard said.

However, he believes that insurers want to get away from the storm deductible in favor of wind and hail labeling. “In the next five years, the said storm deductible will go away, everything will be a wind hail deductible,” Fayard said.

The tornadoes that devastated parts of Louisiana came just as the state is already in the midst of an insurance crisis. The current situation has left the state’s insurer of last resort, Louisiana Citizens, bloated with policyholders who have lost coverage from insurance companies that fail financially or leave the state.

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Dan Burghardt owns the agency that bears his name. “Hopefully something will happen where we can have some relief so that people with citizens who are expecting a 63 percent increase in rates next year have a place to go,” Burghardt said.

And Burghardt says that even if there are some insurers interested in entering the Louisiana insurance market, reinsurance could be an issue. Reinsurance is coverage that insurers buy.

“Even if new companies decide to come into the state where they will get reinsurance from, which has been the cause of some of these recent bankruptcies, liquidations because the right layers of reinsurance are not in place to protect them from multiple storms, I see it’s going to be a little difficult for the next year – hoping we can find some companies,” he said.

“Even if new companies decide to come into the state, where do they get reinsurance from,” said Burghardt.

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