How Named Storms Affect Your Insurance Coverage

Palm tree in hurricane

Hurricane season is upon us, and forecasters are predicting an active year. Before weather reports have you glued to the TV, here are a few things to know about hurricanes, named storms and how any strong storms can affect your insurance coverage.

How hurricanes form

A storm goes through several stages before it becomes a hurricane. They include:

  • Tropical depressions occur when a group of thunderstorms come together over an ocean. These storms usually originate over tropical water, have a small amount of rotation at their center and have winds at or below 39 miles per hour.
  • Tropical storms feature faster winds (anywhere between 39 and 73 miles per hour) and a more cyclonic shape and heavy thunderstorms. Tropical storms may be less powerful than hurricanes, but they can still cause an incredible amount of damage if they reach land.
  • Hurricanes are among the strongest and most devastating storms on earth. They’re divided into five categories, with Category One hurricane winds starting at 74 miles per hour and Category Five hurricane winds reaching a whopping 157 miles or more per hour.

A storm is called a hurricane when it forms over the Atlantic and the eastern and central Pacific Oceans; a cyclone when it forms over the southern Pacific and Indian Oceans; and a typhoon when it forms over the western Pacific Ocean.

Why hurricanes are named

Names are given to tropical storms and hurricanes to give people a quick reference point and to reduce confusion.

“Unlike other storms, hurricanes can be around for weeks,” says Dennis Feltgen, a public affairs specialist and meteorologist for the National Hurricane Center. “We’ve also had cases where up to five named storms formed at the same time. For these reasons, we name hurricanes and not other types of storms.”

Some early naming conventions included naming hurricanes after the saint’s day on which they fell and the phonetic alphabet. It wasn’t until 1953 that the National Weather Service (NWS) began naming hurricanes after simple, easy-to-remember women’s names. (Men’s names were later added in 1978.)

Today, the NWS maintains six lists of names that rotate every six years. The only exceptions are the 77 names of the most damaging hurricanes the World Meteorological Organization retired out of respect to victims and survivors.

Last year, The Weather Channel (TWC)—a private cable and satellite television network that’s completely separate from the NWS—announced that it would start naming winter storms. When asked why, they cited many of the same reasons behind naming hurricanes—namely, an easier and more effective way to raise awareness and communicate updates about a storm.

The decision ended up generating a major backlash. Critics accused TWC of sensationalizing the weather and overstepping the authority of the NWS. They also criticized TWC’s unusual list of storm names that included Q, Ukko and Xerxes. (The NWS does not recognize these names.)

Today, a Facebook page opposing the decision has more than 1,000 supporters.

Deductible drama around named storms

Another reason people opposed naming winter storms had to do with named-storm deductible clauses in insurance policies. These clauses stipulate that an insurer can charge a higher deductible than normal once a weather event becomes a named storm.

Though this fear proved groundless with respect to winter storms, it still applies to hurricane and wind damage coverage. Many named-storm deductible clauses work by requiring a deductible that’s a certain percentage of a home’s value—anywhere from one to 10 percent—instead of a fixed dollar amount. That means instead of paying a $500 or $1,000 deductible, a house that’s insured for the U.S. average of $161,100 would shell out $16,100 if their named-storm deductible was 10 percent.

Luckily for most Customers in Superstorm Sandy’s path, the National Hurricane Center declared Sandy a post-tropical storm just before it made landfall. This meant the named-storm deductible couldn’t be triggered, saving many policyholders big bucks.

With ERIE, you don’t have to worry about a named-storm deductible.

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