Why are insurance deductibles so high?
Short answer. Homeowners deductibles have climbed mainly because storm claims, especially hail and wind roof claims, have become more frequent and more expensive, and higher deductibles shift small and mid sized losses back to homeowners. Percentage wind and hail deductibles also grow automatically as home values and dwelling limits go up.
The forces behind it
- Severe storms: hail, straight line winds and tornadoes have become one of the biggest sources of insured home losses in the country, and roofs take the brunt. Insurers respond by pushing more of each loss onto the policyholder.
- Rebuilding costs: shingles, underlayment, lumber and labor cost far more than they did a decade ago, so even a modest roof claim is a bigger check.
- Percentage deductibles: a 1 or 2 percent wind and hail deductible is tied to the dwelling limit. As limits rise with construction costs, the deductible rises with them.
- Holding premiums down: insurers offer, and sometimes require, higher deductibles to keep premiums from climbing even faster.
- Reinsurance: insurers buy their own coverage for catastrophes, and that cost has risen too.
What you can do about it
- Price a lower deductible at renewal. Sometimes the premium difference is smaller than you expect.
- Ask about roof discounts. Many insurers credit newer roofs and impact-resistant shingles, which can offset the cost of a lower deductible.
- Shop the policy through an independent agent who can compare several insurers' deductible options.
- Keep the deductible amount in savings so a storm does not force a hard choice.
What not to do
Do not accept a contractor's offer to cover it. Georgia law prohibits roofers from waiving or rebating deductibles, and a claim built on a hidden deductible can be treated as insurance fraud, with the homeowner pulled in too.
More: how percentage deductibles work and why a roofer cannot pay your deductible.