Large Wind & Hail Deductibles on Your Home Insurance Policy? — Introducing a New Way to Buy Them Down!

Large Wind & Hail Deductibles on Your Home Insurance Policy? — Introducing a New Way to Buy Them Down!

If you’re a Central Park homeowner, you already know the weather here can be as dramatic as the mountain views. From intense thunderstorms to powerful hail events and high winds sweeping through the neighborhood, we see lots of severe weather (remember the hail storm on May 30, 2024?). While that’s part of life here, it’s also why our homeowners insurance policies come with high wind and hail deductibles — and why a new insurance product, the wind and hail deductible buydown policy, is becoming an increasingly important part of homeowners’ risk planning.

Most homeowners insurance policies have a standard deductible — typically a flat amount like $1,000 or $2500— that applies to things like water damage or theft. But wind and hail is treated differently, and those deductibles are often a percentage of your dwelling coverage, not a flat dollar figure (e.g., 1–2% of your home’s coverage).

For a home insured for $750,000, a 2% wind and hail deductible would mean you’d pay $15,000 out of pocket before your insurance kicks in — a much bigger bite than your standard deductible.

The difference between a $1,000 standard deductible and a $15,000+ wind and hail deductible is significant and the unpredictability of these large, weather-driven deductibles can also make financial planning harder. Unlike a regular deductible you might be comfortable funding from savings, a percentage wind and hail deductible can catch you by surprise — especially after an unexpected storm.

Enter: The Wind & Hail Deductible Buydown Policy

A new product called a wind & hail deductible buydown policy (also called deductible buyback) is a standalone policy that sits on top of your primary homeowners policy.

Here’s how it works:

• You purchase a secondary policy specifically designed to cover part of your high wind and hail deductible.
• If you have a covered wind or hail loss, this product pays toward your deductible, reducing the amount you must pay before your main policy pays the rest.

For example, if your traditional policy has a 2% wind/hail deductible (say $20,000 on a $1M home policy), you could buy a buydown policy that reduces your out-of-pocket expense to a much more manageable amount — such as a flat $2,500 or $5,000.

The new year is a great time to review your home policy and make sure you are comfortable with your coverages and deductibles. Hail season isn’t too far away, so reach out if you would like to discuss or learn more.

(PS. If you live in a condo or town home with a secondary HOA you may also find this recent Central Park Scoop blog post helpful! It can help you avoid the burden of having to absorb a large special assessment when a new roof is needed on your building!)