When Ted opened his dental practice in East Dallas years ago, life sure seemed a lot simpler. He built relationships with families who trusted him while he invested his time, money, and energy into the community. As a result, his practice thrived.
As part of his investment along the way, he bought the office building he worked in to give him more control over his future. Back then, property insurance programs were a lot easier to obtain and understand. He worked with an insurance agent who has long since retired and he now doesn't even know who will be on the other end of the phone when he calls.
Ted has noticed that his property insurance premiums have been climbing the last few years. And not just by a little, but a lot!
What Ted didn't realize is that his coverage terms have been shrinking making his out of pocket costs go up and up. Especially for wind and hail coverage! The insurance company practices have been to send a notice in the mail about the updated terms. And his new agent that he doesn't know has been missing in action.
Then the storm blew through East Dallas.
A spring hailstorm rolled through and hammered his roof. Ted filed an insurance claim for the hail damage as any business owner would, hoping for a straightforward process. Don't we all.
Instead, he found out that he had much higher deductibles for damage during the storm than he thought he did. Like most property owners are currently finding out, these large deductibles are now the norm.
Ted was furious and started making phone calls.
We know some people want the highlights. So here are links to the most important topics about wind and hail deductible buydowns.
And if that is not enough, you can skip to our FAQs at the bottom.
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 storm damages is no longer one percent. The insurance carriers have raised those percentage deductibles in an attempt to keep the cost of insurance down. And the 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 insurance claim case 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.
Sadly, this trend has taken hold across the state. Especially in places like Dallas-Fort Worth where hailstorms are regular visitors.
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:
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.
Deductibles aren't just fine print. They shape how your policy responds when you need it most. Ted found this out the hard way when he made his claim.
Higher deductibles mean 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 when a storm causes real damage to your commercial property.
Insurance companies call this setup shared risk. They have made you take on more of the claim payments burden, and they take on less. Business owners like Ted are feeling the pendulum swing far too far towards his direction.
After dealing with the surprise of a five percent deductible, Ted started digging into his options. That’s when he came across a solution more business owners should know about. The wind and hail deductible buydown policy.
A deductible buydown policy, also called deductible buyback programs, is a separate insurance policy targeted at commercial property insurance. It doesn’t replace your commercial coverage. It works alongside your primary policy.
Let’s say your commercial property policy has a five percent deductible for covered claims for hail or wind loss. If your building is worth $1,000,000, you would be responsible for $50,000 of a hail claim since that is 5% of that number.
A buy down policy can reduce your financial exposure in the claim processing by reducing your percentage deductible. This policy will cover the difference between the original five percent and a more manageable amount, like two 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.
Property owners should strongly consider one if any of this sounds familiar:
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.
Before you jump in, make sure you’re set up for success.
A great commercial property insurance agent will also want to match up the policy dates to avoid confusion when claims happen.
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.
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.