What is a wind and hail windstorm insurance policy?

03 Dec

This has been a banner year for severe storms and hurricanes and some communities have been hit hard. All of these storms have reminded many homeowners exactly how important it is to protect their home with insurance. Unfortunately, for much of this type of damage, homeowners must be carrying windstorm insurance in addition to homeowners insurance. 

Windstorm insurance will help pay for damage to your home that is done by wind or hail. These are the only two perils covered by these policies. Windstorm insurance can be expensive if you live in a high-risk area, but this coverage can be a financial lifesaver if your home is severely damaged or destroyed by wind or hail. 

This coverage goes by many names, wind insurance windstorm, wind and hail, or even hurricane coverage.

Here is a quick primer on everything you need to know about windstorm insurance. 

What is windstorm insurance?

In most locations, windstorm and hail damage is a covered peril on standard homeowner insurance policies but in high-risk areas, wind and hail damage may be excluded from a homeowners policy or require a separate deductible that applies to wind and hail damage. In most cases, if wind and hail damage is excluded or requires a rider with a separate deductible, your mortgage lender will require that you carry this coverage. 

Windstorm insurance covers damage that is done by wind or hail only. Most windstorm policies also include loss of use coverage. This coverage will help pay your day-to-day expenses if your home is deemed unlivable, you lost your roof as an example, due to wind or hail damage. Examples of bills this coverage will pay include hotel bills, restaurants or even dry-cleaning costs.  

Windstorm deductibles

If your homeowners insurance comes with a separate windstorm deductible or you have to add a rider or even purchase a separate windstorm policy, it will almost always come with a percentage deductible. 

Windstorm policies, like all insurance policies have a deductible. This is the amount you have to pay before the insurance policy pays out. However, windstorm deductibles are different than a normal flat rate deductible and understanding the difference between the two is very important.

  • Standard deductible: A standard deductible means you will need to pay a specific amount before the policy covers the rest of the damage. This is a flat amount that is laid out in the policy.  As an example, if your deductible is $500 you would have to pay for the first $500 in repairs and then your insurance policy covers the rest. In most cases, you can choose your deductible from standard amounts that range from $250 to $2,000. Deductible amounts vary by insurer. Always remember, the lower the deductible, the higher your premium. 
  • Percentage deductible: A windstorm policy typically come with a percentage deductible. This means that you will have to pay a percentage of the policies total dwelling coverage limit as the deductible. As an example, if your policy has a 4 percent deductible and you are carrying $300,000 in insurance on your home, you will need to cover the first $12,000 in repair costs. 

Percentage deductibles amounts vary by insurer but in most cases they range between 1 and 5 percent but can go higher in some areas. 

Do I need windstorm insurance?

Windstorm insurance is not legally required but if you live in a high-risk area and your homeowners insurance does not offer coverage for wind and hail damage, your mortgage lender will most likely require that you carry this coverage. 

According to the Insurance Information Institute, the following states allow insurers to exclude windstorm damage or allow separate windstorm deductibles:

If you live in one of these states, you should read your policy and check the details of wind and hail coverage.

Windstorm insurance options in certain states

If you live in certain areas (think coastal living), windstorm insurance can be pretty expensive and in some extremely high-risk areas, it may not even be available in the private insurance market. There are state run insurers of last resort that provide windstorm insurance, but these policies tend to be very pricey and offer limited coverage. 

As an example, homeowners in Texas who cannot find wind and hail coverage can obtain it through the Texas Windstorm Insurance Association (TWIA). Florida also has an insurer of last resort that provides coverage to homeowners with no other options through the state-run Citizens Property Insurance Corporation (CPIC).

Many other states have insurer of last resort plans known as FAIR and Beach plans which help insure homeowners in areas where private market insurance is difficult or impossible to get. Here is a list by state of the various plans available:

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