It’s the time of year when severe weather ravages parts of the United States. High winds and heavy rains with hail can cause plenty of damage to any business. It can be especially devastating to horticultural industry businesses like yours, since buildings and plant stock tend to be more at risk.
For example, soft or brittle cladding on greenhouse roofs, gable ends, and sidewalls may be easily damaged. That vulnerability can mean higher insurance costs. To help keep insurance coverage affordable, many policies now include a percentage deductible—anything from one to five percent—to help lower your premium.
Wind and hail deductibles started showing up on insurance policies after Hurricane Katrina hit in 2005. They’re designed so an insured will pay an amount out-of-pocket before the insurance company pays for damages.
Here’s how it works. A large property owner with multiple buildings, standalone greenhouses, and gutter-connected greenhouses is hit hard by a catastrophic wind/hail event. If the value of the property is $10 million and the owner has a policy with a three percent deductible, their out-of-pocket cost for repairs would be $300,000. Other conditions within the policy may also apply.
The states where wind or hail deductibles are becoming more common include Texas, Oklahoma, parts of Colorado, and midwestern states like Kansas, Nebraska, and Ohio. Wind and hail zone maps are available from many meteorological sources and are used by insurance companies when deciding where a percentage deductible would apply.
If you don’t know if your policy has a wind/hail deductible, ask. Insurers are required by law to tell you what your policy deductibles are and when changes are made to your policy. If you don’t understand your policy or a renewal notice, be sure to talk with your agent for clarification.