October 14, 2020

Commissioner Donelon Commends USAA for Waiving the Standard Deductible on Second Hurricane Claims in Louisiana

Insurance Commissioner Jim Donelon lauds USAA, Louisiana’s seventh largest homeowners insurer, for not charging Louisiana policyholders hit by two hurricane losses the all-perils deductible on their second hurricane claim this season.

“I am delighted to learn that USAA is taking this generous and compassionate move to assist its members in Louisiana,” said Commissioner Donelon. “The people of Louisiana have endured so much economic stress this year with hurricanes Laura and Delta that I commend USAA for its action.”

USAA told the Commissioner it will only charge its Louisiana policyholders one named storm/hurricane deductible in the event they incurred damage from both Laura and Delta. If Laura consumed the entirety of the named storm/hurricane deductible, there will be no deductible applied to damage caused by Delta. If Laura did not consume all of the named storm/hurricane deductible, the member will only have to absorb the unused amount of that deductible with no other deductible being charged. USAA will not impose the standard policy deductible on the second hurricane claim, even though it is permitted by law.

Louisiana’s single-season named-storm/hurricane deductible law prevents admitted insurance companies regulated by the Louisiana Department of Insurance from charging more than one named-storm/hurricane deductible per year. But the law leaves companies free to charge the normal policy deductible on subsequent claims once the named-storm/hurricane deductible has been exhausted during a calendar year.

USAA told Commissioner Donelon it would not charge an all-perils policy deductible because it was concerned about the financial well-being of its policyholders.

Named-storm/hurricane deductibles are typically 2% to 5% of the insured value of a home. Regular policy deductibles are typically $500 to $2,500 per claim.

Named-storm/hurricane deductibles make it more palatable for insurers to do business in coastal states in the Atlantic basin. These deductibles became the norm after Hurricane Katrina and helped stabilize the homeowners market in Louisiana. But they are expensive for policyholders and reduce the amount of money that an insurer will pay on a storm claim.

In 2019, USAA insured 2.56% of the homes in Louisiana, making it the seventh largest homeowners insurer in our state.

The Louisiana Legislature created the single-season deductible law in 2009 after hurricanes Gustav and Ike hit Louisiana and Texas two weeks apart in 2008, illustrating the potential for two hurricane deductibles in the same season. The Legislature modeled its legislation on a similar law in Florida. The value of the legislation has been largely untested until now.


About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting