Claims due to wind or hail damage are among the most common types of claims in the US and Canada, causing billions of dollars each year and accounting for as much as half of all home insurance claims in some years. Most home insurance policies cover damage to homes due to wind or hail (or both). However, it‘s helpful to understand how this coverage works.
Many home insurance policies now use a separate deductible for wind and hail damage. The deductible is the part of the claim you pay and is common to many types of insurance, like auto insurance, home insurance, or even health insurance in some cases. With auto or home insurance, the deductible applies per occurrence, whereas with some other types of insurance the deductible is an annual amount.
A wind or wind and hail deductible can be either a fixed dollar amount or it can be a percentage of the insured value for your home. Different insurers may approach the deductible structure in different ways. If you have a fixed $1,000 deductible for wind and hail, $1,000 is subtracted from the claim payment for covered claims. If your deductible is percentage-based, however, the deductible amount will be X percent of the insured value of your home. If your home is insured for $200,000 and the wind and hail deductible is 1%, your share of the claim is $2,000.
Your home insurance policy also has a standard deductible. It‘s important to understand that the standard deductible applies to covered claims — unless a special deductible is triggered by the type of claim. For a kitchen fire, your standard deductible would apply. For wind damage to your siding, a wind and hail deductible may replace the standard deductible — but you wouldn‘t pay both deductibles for the wind claim.
Insurance is intended to protect against large financial losses, but there can still be some expenses for the insured. By using deductibles, or even special deductibles like a wind and hail deductible, your insurer is finding a way to protect against larger losses without creating higher premiums for everyone. A small part of the repair expense is paid by the insured in the form of a deductible.
Often, you have the option to adjust the deductible amount on your home insurance policy, subject to a minimum amount which may vary depending on your state, province, or insurer. It‘s important to choose a deductible amount that‘s realistic within your family‘s budget. Choosing a higher deductible can lower premiums but the deductible is real money you‘ll need to repair your home if you have a claim, so it‘s essential to choose a number that‘s within your financial reach.
If you haven‘t reviewed your coverage lately, just reach out to your broker to schedule a review. You can often customize your policy in many ways to ensure your policy protects you as thoroughly as possible.
