With tightening in the insurance industry’s underwriting of late, Wind/hail deductibles are becoming more common. Particularly on insureds with large property schedules.
What exactly is a % wind wind/hail deductible and what to look for?
Basically, a % deductible is applied only for losses caused by the 2 perils (wind and hail). Any other covered cause of loss would have a flat deductible such as $1,000, $2,500, and so on. Percentage deductibles for wind/hail are not always a bad thing. It mostly depends on the structure of your policy. For example, does your policy tie your insurable values to a particular location, or are they written as blanket? If the policy ties the values to each location, then the % deductible is typically also applicable per location. For example, if you have a total of 10 locations with $100,000 at each location in values and a 10% wind deductible, your deductible could be two different numbers. If your deductible is tied per location and it states that it is a % of values by location, then your deductible for a wind related loss at any of the locations would be $10,000. On the flip side, if you have the same values by location but the % deductible is of the total insurable values, you have a problem. A total loss at any one location would equal $100,000 which also would equal the 10% deductible. This would not be favorable.
Underwriting varies from company to company; so make sure you have an informed agent that keeps up with current industry trends – this will keep you from being blown away by a % deductible at a time of loss.