- Wind and hail are usually covered through a standard home insurance policy, but in states with higher risks of wind and hail events, a special wind and hail deductible may be present.
- Wind and hail deductibles are set at either a dollar amount or a percentage of the dwelling coverage limit.
- If your homeowners policy doesn’t mention wind and hail deductible, then you will have to pay just the standard deductible amount that you set when getting the policy.
What is a wind and hail insurance deductible?
Standard home insurance policies have a deductible that typically equates to anywhere from $500 to $2,000. This means that the insured homeowner must pay anywhere from $500 to $2,000 towards covered damage repairs for the insurance company to pay under the rules of the policy. In some cases, insurers that are insuring a homeowner in a higher-risk area for wind and hail damage will include a separate deductible that the homeowner must pay in order for coverage to kick in when this type of damage occurs.
Insurance companies have put these separate deductibles in place to better protect themselves as a company from the common peril of wind and hail in some areas of the country and protect their ability to pay claims. This separate deductible will only apply when damage is caused by wind, hail, tornado, or some other wind-driven event such as a hurricane.
These deductibles can turn out to be quite a high expense to the homeowner depending on the language in the contract, so it is important for a homeowner to know how their specific policy works.
How does a wind and hail deductible work?
Wind and hail deductibles typically work in one of two ways. First, the deductible may be a dollar amount like a standard home insurance policy deductible. This means that the deductible can be set at something like $3,000 when wind or hail is the cause of damage, but the deductible might be set at $1,000 for any other covered peril that causes damage.
The second way the wind and hail deductible might work is on a percentage basis. Typically, the percentage is anywhere from one to five percent of the dwelling coverage (section A) maximum coverage limit. Let’s say that your wind and hail deductible is 2% of the coverage A limit, which is $250,000. In this case, your wind and hail deductible would be $5,000 even though your deductible for any other peril might be $1,000.
Different states have laws surrounding how high insurance providers are allowed to make their wind and hail deductible. Each state is different, but typically the max for a flat dollar amount is $10,000 and the highest percentage is 10%. Insurance companies in the same location may differ in what they choose to charge.
Why a different deductible for wind and hail?
Wind and hail are common and costly peril in some parts of the country. Insurance companies, in an effort to better protect their bottom line and be able to adequately pay claims in these high-risk areas for this damage, have implemented these higher deductibles, so that the homeowner has more of a stake in the damage and the insurer has less of a financial burden placed on them as a company.
While this unique deductible is designed to protect the insurance company, it also can help to keep premiums low for homeowners in these high-risk areas around the country. Typically you will see this sort of deductible in the Midwest, “Tornado Alley” and along the coasts that are susceptible to hurricanes and tropical storms.
Summary
A wind and hail deductible is generally a higher deductible than the deductible under a standard home insurance policy. This deductible is typically implemented in high-risk areas. In higher-risk areas around the country, wind and hail can be excluded from a standard policy, but can sometimes be included as an additional coverage with this separate deductible or can be purchased as a standalone policy. While it can add more of a premium cost to a homeowner, it could save the homeowner a significant amount of money when disaster strikes.
