Three limits that decide whether the protection is real for you

The $20 million cliff. Total insured value at or above twenty million dollars, and the section simply does not apply. There is no proration and no partial benefit.

Authorized insurers only. The rule binds “an authorized insurer” — an admitted carrier. A surplus-lines master policy, which is how a great many Louisiana coastal associations are now placed, is outside the section entirely.

It resets on a change of carrier or a change of deductible.

“D. If an insured pays a named storm or hurricane deductible for a covered loss as provided in this Section, but changes insurance companies during the calendar year for the previously claimed property or renews a policy which includes a deductible of a different amount, the insured is subject to a new named storm or hurricane deductible under the new or renewed insurance policy for that same property if the new policy includes such a deductible.”

An association that shops the market mid-year after a June storm starts the deductible clock again for a September one. That is a genuine tension between two sensible instincts — shop the renewal, and preserve the annual credit.

The section also defines its subject broadly enough to catch the usual policy language: “(3) 'Separate deductible' means a deductible that applies to direct physical loss or damage resulting from a specified weather event and may be expressed as a percentage of the insured value of the property or as a specific dollar amount and includes hurricane, named storm, and wind and hail deductibles.”

What is a market term and what is law

Worth separating, because Louisiana readers are misled on this constantly. A two-to-five-percent-of-value named-storm deductible is an underwriting term the carrier chose. Nothing in Louisiana law caps it. R.S. 22:1267.1 does not limit the size of the deductible; it limits how many times a year the carrier may apply it, for a subset of policies.

And the statute was not amended in 2025 or 2026. Its credits line reads “Acts 2021, No. 164, §1; Acts 2022, No. 259, §1, eff. Jan. 1, 2023.”

Which forum decides a master-policy dispute — and it may be two at once

Where an association is placed in surplus lines, the arbitration question that follows is now well developed in the Fifth Circuit, and the answer splits a single placement.

In Transportation Consultants, Inc. v. Certain Underwriters at Lloyd's, London, No. 25-30372 (5th Cir. Sept. 3, 2026), the policy covered Louisiana property, was subscribed by nine domestic and two foreign insurers, contained an arbitration clause, and contained a Contract Allocation Endorsement. The court quoted the endorsement: “This contract shall be constructed as a separate contract between the Insured and each of the Underwriters.” It then held:

“As the parties' policy instructs, we read it as containing separate agreements between Transportation Consultants and each Insurer. Louisiana law governs the policy's contracts between Transportation Consultants and the domestic insurers and prohibits enforcement of the arbitration agreements in those contracts. … The Insurers cannot use equitable estoppel to avoid that positive law. … Therefore, the district court's order denying the Insurers' motion to compel arbitration against the domestic insurers is AFFIRMED.”

And stated the consequence:

“Taken together with Policy Jury, this means that insurance disputes between domestic entities will proceed through litigation under Louisiana law, but disputes with foreign insurers will proceed through arbitration under the Convention.”

The statute doing the work is R.S. 22:868, which makes an arbitration clause unenforceable as to domestic insurers. The endorsement is what lets a court split the subscription. The case was remanded on whether the domestic-insurer litigation should be stayed pending the foreign-insurer arbitration.³

This is not a claim about how any association's dispute resolves. It is a structural fact about surplus-lines placements that is knowable before a loss, because the endorsement schedule is what determines it.

What a board can do

• Find your total insured value and compare it to $20 million. It is the single number that decides whether the annual rule applies.
• Ask whether the carrier is admitted or surplus lines. Surplus lines is outside R.S. 22:1267.1 and inside the arbitration problem.
• Keep storm-loss receipts. The annual credit is documentary by the statute's own terms.
• Have counsel read the endorsement schedule now. A Contract Allocation Endorsement is what splits a claim into two forums.
• Size reserves against the deductible, not the premium. The deductible is the number that becomes a special assessment under R.S. 9:1123.112(G).

What to watch next

Whether the Law Institute's Condominium Act revision addresses deductible allocation between association and unit owners — the gap the current Act leaves entirely to the declaration. And the Institute's separate arbitration project, which is working toward a Louisiana version of the Revised Uniform Arbitration Act.