Why do insurance companies have deductibles, and why are storm deductibles so high?
The basic economics
Insurance works best for losses that are sudden, large and uncertain. Small repairs are frequent and predictable, and handling them through claims would cost more in adjusting and paperwork than the repairs themselves. A deductible keeps those out, so premiums can focus on the losses families cannot absorb.
Why wind and hail are treated differently
A kitchen fire affects one house. A hailstorm can damage roofs across several counties at once. Wind and hail rank among the most common sources of homeowners claims nationally, and roof replacements are expensive. To manage that, insurers in hail and wind prone areas often use a separate wind and hail deductible, frequently 1 or 2 percent of the dwelling limit, so the homeowner's share grows with the size of the home. See percentage wind and hail deductibles.
Why deductibles keep rising
- Higher construction and material costs make each roof claim larger.
- Dwelling limits rise with inflation, so a percentage deductible rises in dollars too.
- Some insurers make higher deductibles the default to hold premiums down.
What you can do
Ask for every deductible in dollars at renewal, compare the premium difference for lower options, and keep that amount in savings. Before filing a small claim, consider the long term effect described in does a roof claim raise premiums in Georgia.