Here in North Texas, the question is not if a hailstorm will hit, but when. And when it does, the number on your policy that matters most may be one you have never looked at closely: your deductible. Many Texas homeowners are surprised to learn they owe several thousand dollars before their insurance pays anything on a roof claim. The off-season is the perfect time to understand what you have, before spring storms roll in. Here are five things every Texas homeowner should know.
1. You May Have Two Different Deductibles
Most Texas homeowners policies have an “all other perils” deductible that applies to things like fire, theft, or a burst pipe. Many also have a separate wind and hail deductible that applies only when wind or hail causes the damage. These two are often very different amounts, so check your declarations page to see both.
2. Percentage Deductibles Are Based on Your Home’s Coverage, Not the Claim
Your deductible can be a flat dollar amount, like $2,500, or a percentage of your home’s insured value. Wind and hail deductibles in Texas are commonly 1% or 2% or more. The percentage is figured on your dwelling coverage limit, not on the size of the claim.
Here’s the math: If your home is insured for $350,000 and you have a 2% wind and hail deductible, you pay the first $7,000 of any hail claim. If your roof repair costs $12,000, your insurance pays $5,000. If the damage is $6,500, you may not get a check at all.
Also keep in mind that as home values and rebuilding costs rise, your dwelling coverage often goes up at renewal, and a percentage deductible rises right along with it.
3. How Your Roof Is Covered Matters Just as Much
Your deductible is only half of the equation. The other half is how your policy pays for the roof itself. Today, most Texas policies settle wind and hail roof claims in one of three ways:
- Replacement Cost: Pays to replace your damaged roof with a new one at today’s prices, minus your deductible. This is the strongest coverage, and it usually costs the most.
- Actual Cash Value: Takes depreciation off for the roof’s age and wear. The Texas Department of Insurance gives this example: if a new roof costs $10,000, a 10-year-old roof may have an actual cash value of only about $7,000, and your deductible comes out of that amount.
- Scheduled Roof Payments: Also called a roof payment schedule, this endorsement pays a set percentage of the replacement cost based on your roof’s age and material. A newer roof may be paid at or near full value, but that percentage drops each year, and an older roof may only be paid a small fraction of what it costs to replace. It usually applies only to wind and hail damage to the roof surface, not the rest of your home. It can lower your premium, but it pays to know your roof’s age and where it falls on the schedule.
Many carriers have moved older roofs to actual cash value or a payment schedule in recent years, sometimes at renewal. Check your declarations page and endorsements, or give us a call and we will look at it with you.
4. Watch for Cosmetic Damage Exclusions
Some Texas policies include an endorsement that excludes cosmetic hail damage to your roof, such as dents in metal roofing that do not cause leaks or affect how the roof works. These endorsements can lower your premium, but they can also mean a dented roof does not qualify for a claim. Know whether your policy has one, especially if you have a metal roof.
5. Choose Your Deductible on Purpose
A higher deductible usually means a lower premium, and a lower deductible usually costs more each year. There is no one right answer. The key is choosing an amount you could comfortably pay out of pocket after a storm. Ask yourself:
- What is my wind and hail deductible in actual dollars, not just as a percentage?
- Could I cover that amount from savings if a storm hit next spring?
- Is my roof covered at replacement cost, actual cash value, or on a payment schedule?
- How much would my premium change with a different deductible option?
Need a Texas Homeowners Quote?
Deductible options, roof coverage, and premiums can vary a lot from one carrier to the next, and the cheapest policy is not always the best value once a storm hits. As an independent agency, TWFG Harrell Insurance can compare multiple carriers side by side and show you exactly what you would pay out of pocket on a claim, not just what the premium is. Whether you are buying a new home, facing a rate increase at renewal, or just want a second opinion on your current policy, we are here to help. We are a local Midlothian agency serving families and businesses across the DFW area and the Lone Star State.
Request your free homeowners insurance quote today. Call us at 817-839-2848 or visit twfgharrellinsurance.com. Let’s make sure you know your numbers before the next storm.
This article is for general informational purposes only and does not modify or replace the terms of any insurance policy. Coverage is subject to policy terms, conditions, and exclusions.