Wind/Hail Deductible
A wind/hail deductible is a separate deductible, often percentage-based, that applies to property damage caused by wind and hail events, distinct from the standard property deductible.
Wind and hail deductibles are separate provisions within a property insurance policy that establish a different, usually higher, deductible for losses caused by wind and hail than the deductible that applies to other covered perils. In many states, particularly those in the hail belt and along the Gulf and Atlantic coasts, wind/hail deductibles are expressed as a percentage of the total insured value rather than a flat dollar amount.
Percentage-based wind/hail deductibles typically range from 1% to 5% of the TIV. On a property insured for $12,000,000, a 2% wind/hail deductible results in a $240,000 out-of-pocket cost before insurance pays for wind or hail damage. This is dramatically higher than a standard flat deductible of $10,000 to $25,000 that might apply to fire or water losses.
The prevalence of percentage-based wind/hail deductibles has increased as insurers have sought to manage their storm loss exposure. For apartment owners, the key is understanding the dollar impact of the percentage and planning accordingly. Deductible buydown endorsements, impact-resistant roofing materials, and dedicated reserve funds are all tools for managing this exposure.