If you haven’t already heard, last week the Weather Channel announced it will begin naming winter storms during the upcoming 2012-2013 winter season. This is a first for the U.S., where hurricanes and tropical storms are given names but winter storms have historically not received the same treatment. The Weather Channel’s goal is “to better communicate the threat and the timing of the significant impacts that accompany these events. The fact is, a storm with a name is easier to follow, which will mean fewer surprises and more preparation.”
The Weather Channel lists the following benefits associated with naming a storm:
- Naming a storm raises awareness.
- Attaching a name makes it much easier to follow a weather system’s progress.
- A storm with a name takes on a personality all its own, which adds to awareness.
- In today’s social media world, a name makes it much easier to reference in communication.
- A named storm is easier to remember and refer to in the future.
Although naming storms seems to provide several benefits, the Weather Channel failed to discuss what impact this practice might have on people’s insurance policies.
If you have read your policy, you have probably noticed that there are several deductibles. One of those deductibles is probably the “Named Storm” deductible, which is typically higher—between 2% and 5% of your policy limits—than your standard deducible. Now that the Weather Channel will be naming winter storms, will any future claims caused by a named winter storm be subjected to the higher deductible?
As is typically the case with the law, the answer is unclear and largely dependent on the language of the policy. However, at least one court has chimed in on the issue. In Six Flags v. Westchester Surplus Lines Insurance Company, a federal court in Louisiana noted the following language in a policy that defined “Named Storm Occurrence” as:
All loss or damage occurring during a period of 72 consecutive hours which is caused by or results from a storm or weather disturbance which is named by the national Weather Service or any other recognized meteorological authority, or any storm or weather disturbance designated by the Property claims Service–American Insurance Services Group, Inc. as a numbered Catastrophe.
Whether the Weather Channel is a “recognized meteorological authority” so as to subject any winter storms it names to the higher deductible is a question left unanswered. If insurers decide not to subject such claims to the higher “named storm” deductible, I believe this will be a non-issue. However, things will get interesting if insurers try to use the Weather Channel’s new policy of naming winter storms to reduce insurance claim payouts.