If you own a home along Colorado’s Front Range, your insurance policy almost certainly carries a separate deductible for wind and hail. And if you have not looked at it lately, the number may shock you.
What a percentage deductible actually means
A traditional deductible is a flat dollar amount: you pay the first $1,000 or $2,500 of any claim. A percentage deductible is calculated from your dwelling coverage, not from the claim size.
Here is the math that surprises people. Suppose your home is insured for $650,000 and your policy carries a 2% wind/hail deductible. Your out-of-pocket share of a hail claim is $13,000. At 5%, it is $32,500. The size of the storm does not matter: a $40,000 roof claim with a 5% deductible on that home pays you $7,500.
Why Colorado carriers did this
The Front Range sits in one of the most hail-active corridors in North America, and carriers have paid billions in roof claims over the past decade. Rather than keep raising premiums alone, most shifted a share of the roof risk back to homeowners through percentage deductibles, roof payment schedules, and cosmetic damage exclusions. Percentage deductibles are now standard on most new Colorado home policies.
Three things to check on your policy today
First, find the wind/hail deductible on your declarations page and turn the percentage into dollars. Second, check whether your roof is covered at replacement cost or on a depreciation schedule that pays less as the roof ages. Third, look for a cosmetic damage exclusion, which can deny claims for dents that do not cause leaks.
You can buy the deductible back down
What most homeowners do not know: a separate, inexpensive policy called a wind/hail deductible buydown can reimburse the gap between your big percentage deductible and a small flat one you choose. After a covered hail claim, your homeowners policy applies its percentage deductible, and the buydown policy pays you back the difference down to, say, $2,500.
For homes above roughly $500,000 in dwelling coverage, the annual buydown premium is typically a small fraction of the exposure it removes. We quote three separate buydown markets and can usually price one the same day from your declarations page.
Want to know your real hail exposure? Send us your declarations page and we will translate the percentages into dollars, then show you what a buydown would cost. Request a quote or call (720) 604-0006.