ed owns a dental practice in East Dallas. He’s been building his business for years. He’s built real relationships with families who trust him, invested in his office, and done things the right way. A few years ago, he made the smart decision to buy the building his practice sits in. That gave him control over his future. Or so he thought.
Lately, Ted’s property insurance premiums have been climbing. And not just by a little, but a lot! At the same time, his coverage seems to be shrinking. Especially for hail! He felt uneasy about it, but like most folks, he figured that’s just how insurance works these days.
Then the storm hit.
A spring hailstorm rolled through Dallas and hammered his roof. Ted filed an insurance claim for the hail damage, hoping for a straightforward process. Don't we all.
Instead, he found out that his wind-hail deductible for damage during the storm had jumped to five percent of his building’s insured value. That’s not a typo. Five percent. It caught him off guard and cost him tens of thousands of dollars in out of pocket costs.
And unfortunately, Ted isn’t the only one in that boat.
So What Happened to Wind-Hail Deductibles For Insurance Coverage?
If you haven’t looked closely at your commercial property insurance lately, now is the time. Many Texas business owners are finding out the hard way that their deductible for hail or wind damage is no longer one percent. The insurance carriers have raised them in an attempt to keep the cost of insurance down. And that percentage keeps going up even as property values skyrocket as well.
What used to be a $10,000 deductible is suddenly $30,000 to $50,000 or more before your claim for wind or hail starts paying out. That’s not just frustrating. It’s a major business risk if you’re not ready for it.
These percentage-based deductibles are usually carved out specifically for wind and hail. And in Texas, those are the most likely claims you’ll face. This trend has taken hold across the state, especially in places like Dallas-Fort Worth where hailstorms are regular visitors.
Why It Matters for Your Insurance Policy
Deductibles aren't just fine print. They shape how your policy responds when you need it most.
The higher the deductible, the more financial risk you're personally carrying because your out of pocket expenses will be higher. You might see a slightly lower premium, but that savings can turn into a painful bill if a storm causes real damage.
Insurance companies call this setup shared risk. You take on more of the claim payments burden, and they take on less. But lately, that balance has shifted too far. Business owners are feeling it.
Why Are Hail Deductibles Getting So High?
The short version is this. There are more storms, more damage, and everything costs more to fix.
Here’s what’s driving these rising deductibles:
- Catastrophic hail events are happening more often.
- Building materials and labor are more expensive than ever.
- Insurance companies are using high deductibles to discourage frequent or small claims.
They’re managing their risk and trying to lower insurance costs. But it leaves business owners like Ted paying for protection that suddenly feels half-baked since they are footing more of the bill now.
Not All Locations Are Treated the Same
Where your business is located matters. A lot.
North Texas sees more hail than most places in the country. Houston and the Gulf Coast feel the effects of hurricanes. Though the extreme winds and hail feels like it is spreading statewide, these two areas are being hit the hardest by the insurance industry when setting rates.
If your building is in one of these areas, chances are your wind and hail deductible is already at three percent or more. You likely don't even realize it.
There’s a Smarter Option: Here's What Ted Learned
After dealing with the surprise five percent deductible, Ted started digging into his options. That’s when he came across a solution more business owners should know about. The hail deductible buy down policy.
A deductible buy down, also called wind buyback coverage, is a separate insurance policy targeted at commercial property insurance. It doesn’t replace your commercial coverage. It works alongside it.
Let’s say your commercial policy has a five percent deductible for covered claims for hail or wind loss. A buy down policy can reduce your financial exposure by reducing your percentage deductible. This policy will cover the difference between the original five percent and a more manageable amount, like one percent.
For Ted, that meant he could stop worrying about whether he could afford to use the policy he paid for. He’d already been hit once. He didn’t want to roll the dice again.
Is a Deductible Buy Down Policy Right for You?
You should strongly consider one if any of this sounds familiar:
- Your hail deductible is greater than two percent.
- You own property in a hail-prone area.
- You want to avoid a massive out-of-pocket payment after a storm.
If you check one or more of those boxes, a buy down might not just be a smart move. It might be the difference between weathering the storm and going into debt because of it.
What You Need to Know Before You Buy
Before you jump in, make sure you’re set up for success.
- Your current policy for wind coverage needs to protect your building and your business personal property.
- The buy down policy should be written by the same agent who handles your main policy. That keeps things aligned and avoids gaps.
- This policy will cost you extra money on property insurance, but is often much less than your deductible amount in a claim situation.
A great commercial property insurance agent will also want to match up the policy dates to avoid confusion when claims happen.
Will It Save You Money?
This is always the question we are asked. Carrying a higher deductible with your primary insurance carrier lowers your annual premium. That savings can then be used to help cover the cost of the buy down.
Also remember the buy down is not an investment. It’s a form of protection. It won’t pay you back unless you file a claim. But if a big storm hits, it can save you tens of thousands of dollars in one go.
Ted looked at the numbers over a five year period and made the call. For him, it was a no-brainer. He’d rather pay a little now than a lot later.
How To Get A Buy Down Policy For Your Business
At Insurance For Texans, we help business owners like Ted every day. We know what’s happening with Texas insurance. And we know how to build customized policy packages that actually work for real Texans in real Texas places.
We’re not beholden to a giant national brand. We work for you. We shop around, customize your coverage, and make sure you’re not blindsided when the next storm rolls in.
If you want to protect your building and your business without letting your deductible sink your budget, this is the conversation you need to have.
Click the button below to learn how deductible buy downs can shield your business from the next big storm.