Steve has lived in Tyler all his life. He’s been in his current home for six years now and, like many Texans, he's no stranger to hail storms. Every spring, he crosses his fingers and hopes the roof holds up to any hail damage that finds his neighborhood.
This year, his homeowners insurance renewal showed up with a big premium increase. He blinked twice when he saw it. Steve’s current policy has a 1% wind/hail deductible, and he really likes that. It is what he has always had for a storm deductible and he believes it fits his budget for out of pocket expenses for a hail insurance claim.
But that renewal insurance premium jump was a lot to swallow, so he began to look at proposals from other insurance companies. These alternative insurance companies only gave him the option for a 2% hail deductible amount. He didn't like doubling that out of pocket amount, but he did like the lower premium cost they were offering.
As Steve was looking at his renewal and contemplating what to do, he saw that he had to accept a roof payment schedule for claim settlement if he wanted to keep the 1% deductible. He had always had replacement cost coverage and considered it his best option.
Steve began to look at the specifics of each type of coverage since hail is the most frequent homeowners insurance claim in Texas. He wanted to understand which policy would cost him more when he files a hail claim. Let's do some math, shall we.
Roof Payment Schedule vs. Replacement Cost Coverage
The key issue in Steve’s dilemma is how the roof is paid for after a hail claim. With a roof payment schedule, the insurance company pays a percentage of the roof’s value based on how old your roof is at the time of the hail storm.
Steve’s roof is six years old.
At that age, the scheduled payout from most insurance companies drops to about 80 percent of the roof replacement cost. So if the total cost to replace Steve’s roof is $25,000, the insurance company would deduct $5,000 before the deductible is even applied.
If that roof replacement ends up costing $30,000 because of labor and material prices, now the deduction would be $6,000. Steve would be responsible for the difference plus the deductible.
This is where the math gets painful.
How Deductibles Factor Into the Claim
With a 1% deductible on a $500,000 home, Steve would have to pay $5,000 before the insurance even steps in for the claim payment. Now add in the depreciation from the roof payment schedule, and he could easily be out another $5,000 or more as the roof ages.
Now compare that to the second option he was given. A 2% deductible with full replacement cost on the roof. That would mean a deductible of $10,000, but no depreciation.
At first, Steve didn’t like the sound of that higher deductible. But when he actually ran the numbers, he realized something important.
If his roof is totaled by hail, and the insurance company pays the full cost to replace it, he could be better off financially as his roof gets older. The longer he keeps the payment schedule policy, the more depreciation kicks in and the less the insurance company pays.
What looked like savings upfront starts to fall apart when a big storm hits and you need help with the hail damage to your home.
What Happens As Your Roof Gets Older
It shouldn't come as a surprise, but every year that goes by with your roof in place, it becomes more susceptible to hail damage. The sun bakes them in the summer, the winds freeze them in the winter, and there seems like continual beatings from hail and wind damage from storms.
As a result, a lot of insurers drop roof value by 15 percent or more in the first five years of the roof's life. By six years, that number climbs to 20 percent. If you’re in a hail-heavy area like East Texas or North Dallas, your roof may get replaced before then. But the insurance coverage is lowered every year that goes by.
The kicker? Many insurance companies are rolling Texans into these homeowners policies automatically with a paper notice. And your insurance agent may not be calling to let you know if there is nothing they can do about it.
That lower deductible may look great on paper, but if it’s paired with a roof payment schedule that strips the value out of your policy little by little and eventually you're underwater on the math you thought you had.
Steve realized this was a math problem cloaked in a risk decision. He didn’t want to take a low wind/hail deductible now if it meant he’d have a major surprise when he needed the coverage most for roof repairs after hail damage.
Why Steve Chose True Texas Home Insurance
After going through all the options and talking to the experienced agents at Insurance For Texans, Steve decided to go with the 2% deductible and keep replacement cost for roof damage.
When he realized that the insurance premium payments were very similar for the two different home insurance policies, he loved the guarantee of only owing the wind/hail deductible amount.
He knew it was likely for a storm hit and having real damage to his roof. He wanted his insurance to cover it without arguing over percentages or leaving him to cover thousands in extra costs if didn't happen for a couple of years.
He said something smart to his agent when he signed the new policy: "I’m not just buying a lower monthly bill. I’m buying the promise of certainty."
That’s the kind of mindset more Texas homeowners are starting to adopt as the insurance carriers continue to change terms and conditions with little notice. Because when a hail storm rips through your neighborhood, the only number that matters is the one on the check your insurance company writes.
Want to Make the Right Call?
True Texas Home Insurance is built for situations just like Steve’s.
We help Texans compare not just the premiums, but what happens when you need to make a claim. We walk through the roof coverage details, the wind and hail deductible trade-offs, and show you what’s really at stake.
If you’re staring at a renewal offer and aren’t sure what you’re giving up to save a few dollars, don’t guess.
Click the button below and talk to one of our local agents. We’ll break it down clearly and help you get the kind of coverage that protects your roof and your wallet.
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