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CW Rea Insurance Agency Blog

All You Ever Wanted to Know About Insurance

Time to talk about your wind/hail deductible.

The entire Midwest experienced high wind this weekend, and today our thoughts are with those who suffered through tornadoes. 

That said, we've met homeowners who don't know the difference between a percentage and flat deductible, and still more who don't know that many carriers use a separate deductible for wind and hail damage, which could be flat or a percentage. Here's the difference between the two:

A flat deductible means that when you have damage that's the result of a covered loss, the insurance company will pay up to the limit of liability -- in the case of a home is usually the replacement cost of the house, not the market value -- less the stated amount. So if you have a $1500 deductible and $30,000 of roof damage, the company should pay $28,500. 

A percentage deductible fluxuates with the limit of liability. For example, if your house has a reconstruction value of $100,000 and a wind/hail deductible of 1%, then your deductible for this kind of damage is $1000. If the reconstruction cost of your home is $472,800, then the deductible is $4728, and in the roof loss briefly described above, the company should pay $25,272. 

What's the other difference? A percentage deductible often means a lower premium, since the carrier is assuming less of the risk. However, it's important to know ahead of time how much you're responsible for in the event of a loss. If the wind only causes $5000 in damage, a $1500 deductible is much different than a $4728 deductible, and may change your opinion on filing a claim -- and may be something you wish you'd known earlier.

If you have any questions about this, contact your agent. Or contact us. Every company is different, so all the broadly-defined scenarios above should be treated as such, and not specific to your policy.