In Texas and Oklahoma, the two lines that decide whether a hailstorm is an inconvenience or a financial event are your wind and hail deductible and how your roof is settled.
Most homeowners compare policies on premium. In hail country that is the wrong comparison. A cheaper policy with a percentage wind and hail deductible and an actual cash value roof is a fundamentally different product from a costlier one with a flat deductible and replacement cost on the roof, and you will not find out which one you bought until an adjuster is standing in your driveway.
42 items · 21 most people miss · free, no signup
Replacement cost or actual cash value: which do I actually have?
The difference is depreciation. Replacement cost pays to repair or rebuild at current prices. Actual cash value pays replacement cost minus depreciation, which the Texas Department of Insurance defines as a decrease in value because of wear and age.
Most people miss thisYour roof is often settled on a different basis than the rest of your house. The Oklahoma Insurance Department states that a homeowner policy typically provides roof coverage on an actual cash value basis, applying depreciation based on the age and condition of the roof. Some policies use replacement cost for the roof, many do not.
Most people miss thisYour coverage can shift as the roof ages, and you may only find out in the mail. TDI notes that as roofs age some companies switch to actual cash value, and if a roof is in poor condition the company might not cover it at all. Read the renewal packet instead of filing it.
Replacement cost claims arrive in two checks. A first partial payment, then the balance after you have started repairs. If you never do the repairs, you never collect the depreciation holdback.
Most people miss thisInsure to rebuild cost, not to purchase price. TDI notes most companies require you to insure for at least 80 percent of replacement cost, and some require 100 percent. The policy is based on the cost to rebuild, not the real estate value. Land does not burn.
Texas homeowner policies are not always the national HO-3. Texas historically used its own promulgated forms, and carriers may now use national forms too. When you compare quotes, compare the actual form, not just the price.
What is my wind and hail deductible really going to cost me?
Most people miss thisA percentage deductible is a percentage of your dwelling coverage, not of the claim. TDI’s worked example: a home insured for $150,000 with a 5 percent deductible carries a $7,500 deductible. On a $400,000 home a 2 percent deductible is $8,000, whether the hail damage totals $9,000 or $90,000.
Most people miss thisMost policies here carry two deductibles. A flat all-other-perils deductible and a separate percentage deductible for wind and hail. People remember the flat one. TDI’s advice is to ask your agent whether the wind and hail deductible differs from the rest.
Most people miss thisIn Texas the windstorm deductible applies to any windstorm, not just named storms. A routine spring hailstorm triggers it. There is no hurricane-only limitation on the standard wind and hail deductible.
Most people miss thisYou can often buy the flat deductible back. The Oklahoma Insurance Department advises asking your carrier whether you can buy back a flat deductible, noting most companies offer the option and that the percentage deductible was implemented to keep premiums down but may cost more at claim time.
Do the arithmetic before you accept the quote. Multiply the percentage by your dwelling limit and decide whether you could write that check on short notice. That number, not the monthly premium, is your real exposure.
Be skeptical of anyone quoting a typical range. No regulator publishes one. As reference points only, TDI illustrates with 5 percent, the Oklahoma department illustrates with 1 percent, and the Texas FAIR Plan writes 1 or 2 percent.
What does my policy NOT cover?
Flood is excluded. Always. TDI is direct that most home policies do not cover damage caused by floods. It requires a separate NFIP or private flood policy.
Most people miss thisNFIP coverage generally takes 30 days to start. FEMA lists narrow exceptions, including no wait when you buy in connection with a mortgage. Buying the week a storm is forecast does not work.
NFIP residential limits are $250,000 building and $100,000 contents. If your rebuild cost is higher you need excess or private flood coverage. You can also flood outside a mapped high-risk zone.
Most people miss thisFoundation movement is excluded, and the foundation endorsement does not fix that. The Texas base policy excludes settling, cracking, shrinking, bulging, or expansion. The slab or foundation endorsement buys coverage for damage from accidental discharge or leakage from a plumbing, heating, air conditioning, or sprinkler system, and still excludes those. It covers the leak under the slab, not the slab moving because North Texas clay soil shrank and swelled.
Earth movement, sewer backup, and mold are outside the base policy. TDI notes policies will not cover mold removal except to repair damage caused by a covered risk. Sewer backup and service line coverage are endorsements.
Most people miss thisOrdinance or law coverage is a separate, capped endorsement. It pays the extra expense of rebuilding to comply with codes that did not exist when the home was built. On an older home, code-required upgrades to wiring, framing, or roof decking during a rebuild can run into five figures the base policy will not pay. Check the declarations page for the cap.
Wear and tear, gradual seepage, and deferred maintenance are never covered. A continuous water leak is specifically excluded. This is the source of most denied water claims.
How does claims history follow the house?
The CLUE report holds seven years. The Comprehensive Loss Underwriting Exchange, run by LexisNexis, collects up to seven years of home and personal property claims. Both the CFPB and TDI confirm the seven-year window.
Most people miss thisClaims attach to the property, not just to you. TDI notes the report lists claims on your home even if you were not the owner at the time. A prior owner’s two hail claims can change what you are quoted on a house you have never lived in.
Most people miss thisYou can ask the seller for the property’s CLUE report before you buy. TDI says so explicitly. Put it on your inspection-period checklist.
You get one free copy of your own report every 12 months. Request it from LexisNexis and dispute anything wrong. The FACT Act gives you the right.
A small claim can cost more than it pays. TDI is direct that premiums can rise after claims and that you could lose claim-free discounts. Get a repair bid first and compare it to your deductible before you open a claim.
Most people miss thisTexas limits which claims can be surcharged. Insurers cannot surcharge you for weather claims or for claims the company did not pay. Knowing which bucket your claim falls into changes the calculation.
Most people miss thisOklahoma protects your first claim by statute. 36 O.S. 3639.1 bars an insurer from cancelling, refusing to renew, or increasing the premium on a policy in effect more than 45 days solely because the insured filed a first claim. There are listed exceptions, but the baseline protection is real and under-used.
Ask before you open a claim number. Ask your agent how an inquiry will be recorded before you turn a question into a filed claim.
How do I lower the premium without gutting the coverage?
Raise the flat all-other-perils deductible on purpose. Moving from $1,000 to $2,500 lowers premium and only matters on a loss you would have filed anyway. Do this deliberately rather than discovering it after a storm.
Impact-resistant shingles are rated Class 1 through Class 4. Under UL Standard 2218, with Class 4 the most impact resistant. TDI confirms the standard and the classes.
Most people miss thisNo Texas regulator mandates a discount amount for Class 4 roofs. TDI states the discount for each class is established by the insurance company on a company-by-company basis. Claims that TDI requires a specific discount range circulate widely in contractor marketing and are not supported by TDI. Get your carrier’s number in writing before you pay for the upgrade.
Most people miss thisOklahoma’s discount statute is FORTIFIED-based and conditional. 36 O.S. 962 requires a discount for wind retrofits only where the insurer determines it is actuarially justified, the property is retrofitted to the IBHS FORTIFIED Home standards, and it is certified by a FORTIFIED evaluator. It applies only to the wind or hail portion of the premium.
Most people miss thisOklahoma has grant money for this. The Oklahoma Insurance Department’s Strengthen Oklahoma Homes program offers grants toward upgrading to the IBHS FORTIFIED roof standard. It requires a homestead exemption on file with your county assessor and runs first-come, first-served.
Ask about credits for leak detection and automatic water shut-off devices. Some insurers offer them and neither state runs a program, so this is a carrier-by-carrier question. Modernizing plumbing, electrical, and HVAC also commonly earns credits.
Use the regulators’ own comparison tools. Texas has HelpInsure.com, run by TDI and the Office of Public Insurance Counsel, showing sample rates plus each company’s financial rating and complaint index. Oklahoma publishes a Home Insurance Rate Comparison. Sample rates are illustrations, not quotes.
When should I get quotes if I am buying?
Get a bindable quote during your option or inspection period. Not the week of closing. Roof age, roof condition, and the property’s claims history all surface at quoting, and any of them can change your monthly payment or make a home difficult to insure at all.
Ask three questions early. How old is the roof, what material is it, and are there open or recent claims on the property. Pair that with the seller’s CLUE report.
Most people miss thisTexas has a backstop, and it does cover wind and hail in DFW. The Texas FAIR Plan Association writes residential coverage statewide for owners declined by at least two licensed insurers actually writing in Texas. It is barred from writing wind and hail only in the coastal catastrophe area.
Most people miss thisThe FAIR Plan is narrower than the standard market. Loss settlement defaults to actual cash value, replacement cost is available by endorsement only on one form, and deductibles are 1 or 2 percent. You apply through an agent, and you are not eligible if you have been offered a policy or renewal.
Most people miss thisTWIA is coastal-only and irrelevant to DFW. The Texas Windstorm Insurance Association serves the designated catastrophe area on the coast. If someone offers it to you for a Dallas-Fort Worth property, that is a signal to slow down.
Most people miss thisOklahoma does not have a FAIR Plan. It runs OK-MAP, the Oklahoma Market Assistance Program, which helps consumers find coverage but does not itself issue policies. That is a meaningful difference if you are counting on a last-resort insurer.
Answer the application honestly. Misstatements about roof age, prior claims, or occupancy can cost you coverage at the moment you need it most.
Texas sets claim-handling deadlines you can hold a carrier to. Under Texas Insurance Code Chapter 542 an insurer must acknowledge a claim and begin investigating not later than the 15th day after notice, accept or reject in writing not later than the 15th business day after receiving all required items, and pay an accepted claim not later than the fifth business day after that. TDI can extend those after a catastrophe.
Dates and deadlines to know
During your option or inspection period
Get a bindable quote and request the property’s CLUE report from the seller.
30 days before you need it
NFIP flood coverage generally takes effect 30 days after purchase, with a mortgage-related exception.
Once every 12 months
Request your free CLUE report and dispute any errors.
At every renewal
Re-read the declarations page for the wind and hail deductible percentage and the roof loss settlement basis. Coverage can change at renewal.
Before you file
Compare a written repair bid against your deductible, and ask your agent how an inquiry will be recorded.
This guide is general information, not insurance, legal, or tax advice. Policy forms, endorsements, deductibles, and eligibility vary by carrier and by property. Review your specific policy with a licensed agent.
Published by Mac Does REI. The McDonald Group provides brokerage services through Fathom Realty in Texas and Dillard Cies Real Estate in Oklahoma. NTX Realty Trust is a separate company and is the principal cash buyer. Nothing here is legal, tax, or insurance advice.
Keep going
The other guides.
All free, all the same format. And the free mortgage calculator does the math with your county's real tax rate.
