One of the first questions we receive from Texas homeowners when talking about their home insurance policy is, "What is my deductible going to be?"
That's with good reason. Living in North Texas, especially right here in the center of the D/FW Metroplex in Grapevine, you know your roof is quite likely to see several rounds of hail.
These storms are not just localized to North Texas. From the plains of the panhandle to the Gulf, substantial storms make Texas a pretty interesting place to live at times from a weather perspective.
What does this have to do with a wind-hail deductible?
What Is A Wind & Hail Deductible?
Every home insurance policy in Texas lists provisions and is arranged in sections. One particular section details the deductibles you pay, i.e., the amount of financial risk you assume in a claim scenario.
Your insurance carrier agrees to provide the rest of the payout once you've taken care of the initial amount, a percentage of the dwelling amount you agreed to when you signed the insurance policy.
What we've seen over the years on Texas home insurance policies boils down to three separate deductibles: Hurricane, Wind and Hail and All Other Perils.
The Wind and Hail deductible applies when a storm produces damaging winds and/or hail.
Usually, it's your roof in need of repair, but a storm could also cause damage to other property. Fences, gutters, windows, siding, all are in the path of these storms and could need repair or replacing.
Because hail claims are so frequent, insurance carriers have taken measure to separate out this deductible in the attempt at some control cost measures.
By putting different parameters in place to make it harder for homeowners in Texas to complete a claim, insurance carriers know they aren't on the full hook for a wind and hail claim. Homeowners will have to pay a deductible.
The days of smaller amounts akin to $500 or $1,000 is now a percentage of the dwelling amount. Though a small percentage, this does mean a couple to a few thousand dollars that need to be paid by you before the insurance carrier pays the rest.
Roofing contractors are partially responsible for this situation after having inflated hail claims for years and promising you, the homeowner, that you wouldn't have to pay the deductible. This was so common, it led to the Texas Legislature to enact a new law in 2019 that prohibits waiving deductibles.
How Does This Affect Me?
This legislation changes the handling and processing of hail claims, and because of the newness of the law, requires some working out of the actual process.
You will want to make sure when shopping for home insurance you are taking into account what you will be responsible to pay if you have a valid roofing claim. Is it 1%, 2%, or even more?
This will help determine if you would be better off replacing the roof yourself or having the insurance carrier provide the funding to do it.
In addition, you'll want to know if your insurance claim will be settled on an actual cash value or replacement cost basis.
Some insurance carriers may require a 1% wind hail deductible to lower the out-of-pocket cost come claim time, however, they may settle your claim on an actual cash value agreement, meaning you'll be on the hook for a lot more of the cost than your deductible.
Having a local, independent insurance agent on your side to help you navigate these situations is important.
First, we have access to a large network of carriers that will help make sure we find the right solution for you that makes the most sense.
Second, we can provide guidance for what actually does make the best sense.
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