Missouri hail storms can cause massive damage in just a few minutes. One storm can leave homeowners dealing with roof damage while multiple vehicles sit in the driveway covered in dents and broken glass. There have been many questions coming in from the storm that occurred on April 28th and rocked our area.
After the storm passes, one of the most common questions we hear at MBG Insurance is:
What Is an Insurance Deductible?
A deductible is the portion of a covered claim you are responsible for paying before your insurance company contributes. Most auto policies have a flat deductible of either $500 or $1,000, but some can be higher or lower.
Many home insurance policies now have a separate wind/hail deductible that is percentage-based rather than a flat dollar amount. This means that if you have a wind or hail loss, you are responsible for paying a percentage of the Coverage A limit on your home.
If your home is insured for $350,000 and you have a 1% wind/hail deductible, your deductible would be $3,500. Many consumers mistakenly believe this percentage applies to the amount of the loss itself, but it actually applies to the insured value of the home.
How Does My Deductible Apply with Multiple Vehicles and a Home?
Each Insurance Carrier handles deductibles differently and it can also vary by state. There are three main ways insurance deductibles can apply during a claim: 1) package level 2) policy level 3) individual item level such as per vehicle or per home. Depending on how your policy is structured, some options can be much more favorable during a major hail storm like the one that impacted Springfield on April 28th.
1. Package-Level Deductible
A package-level deductible is usually the most favorable setup for the customer. This means that during a major hail storm, only the highest deductible applies. Only certain insurance companies offer package deductibles, and typically all of your policies must be with the same company for the package deductible to apply.
2. Policy-Level Deductible
A policy-level deductible is another structure some carriers use. This means that during a major event, you would have one deductible per policy. Companies that issue each vehicle on a separate auto policy can be more costly come claim time if they do their deductible per policy.
3. Item, Vehicle, or Dwelling-Level Deductible
We use the terms item, vehicle, and dwelling because insurance companies may use different wording. This simply means you have a separate deductible for each vehicle, home, RV, etc. damaged in a hail storm. This is generally the least favorable deductible structure for the customer.
Example
Imagine the April 28th storm damages:
- Your home roof with a $3,500 deductible
- Vehicle #1 with a $500 deductible
- Vehicle #2 with a $500 deductible
Package-Level Deductible: Under a package-level deductible structure, you may only pay the highest deductible, which would be $3,500.
Policy-Level Deductible: You would pay the $3,500 home deductible and then one $500 auto deductible, as long as both policies are with the same company and on the same policy package. Your total out of pocket is $4000.
Item, Vehicle or Dwelling Level: You would pay the $3,500 home deductible plus two separate $500 vehicle deductibles. Your total would of pocket would be $4500.
Important Steps in A Claim
When you are going through an insurance claim, it is important to discuss your deductible with your adjuster if multiple vehicles, homes, or other items were damaged. Be sure to ask specifically how the deductible will be applied and let them know about any other related claims you have filed. They can help explain the company’s process and whether your deductible applies at the package, policy, or individual item level.
The Advantage of Using MBG
An independent insurance agency like MBG can compare multiple insurance companies and explain the differences in coverage structures — not just price.
At MBG Insurance, we help clients across Missouri understand:
- Wind and hail deductibles
- Roof coverage options
- Comprehensive auto deductibles
- Multi-vehicle claims
- Replacement cost vs. ACV coverage
- Differences between insurance carriers
Because after a major hail storm, the cheapest policy is not always the best policy.
Final Thoughts
A major hail storm can impact your roof, siding, gutters, windows, and multiple vehicles all at the same time.
The way your deductible applies can make a massive financial difference. Before the next Missouri storm hits, make sure you understand exactly how your policy works. A quick review today could save you thousands tomorrow.
Need Help Reviewing Your Coverage?
If you would like us to review your home and auto insurance deductibles, our team at MBG Insurance can help compare multiple carriers and explain how claims would work before the next hail storm arrives.
Note: It is important to note that deductibles and how they are applied vary by company and even by state. Contact your agent to understand more about your specific policies.