How Your Deductible Actually Works

By Taylor Grant, licensed public adjuster · Published September 13, 2021 · Updated September 24, 2026

Flat deductibles, percentage wind-and-hail deductibles, per-occurrence versus per-building, and why "we will cover your deductible" is an offer to commit a crime with you.

The deductible is the simplest part of a policy to explain and one of the easiest to get wrong, because the number on your declarations page is often not a number at all.

Flat deductible

A dollar amount - $1,000, $2,500, $5,000 - subtracted from the covered loss once per occurrence. Straightforward.

Percentage wind-and-hail deductible

This is the one that hurts. After the big Colorado hail years, carriers moved many Front Range policies to a separate wind-and-hail deductible expressed as a percentage - typically one to five percent.

The critical detail: it is a percentage of the insured value of the building, not of the loss.

On a home insured for $600,000 with a two percent wind-and-hail deductible, a hail claim carries a $12,000 deductible. Not two percent of the $40,000 roof. Two percent of the dwelling limit.

People discover this on the summary page of their first estimate, and it is the reason a claim that seemed worth filing sometimes is not. Check your declarations page for a separate wind-and-hail line before a storm, not after.

Per occurrence, per building, per location

On commercial and multi-building policies, read carefully which one you have:

• Per occurrence - one deductible for the whole storm across all buildings. Best for you.
• Per building - a deductible for each structure. An HOA with fourteen buildings and a $10,000 per-building deductible is absorbing $140,000 of a single hailstorm.
• Per location - somewhere in between.

This is a policy-shopping decision more than a claim decision, but at claim time it determines whether the loss is worth pursuing and how it is presented.

Where the deductible comes off

After depreciation, before payment. In the standard sequence:

replacement cost, minus depreciation, equals actual cash value; minus deductible, equals your first check. The full worked example.

It comes off once, not once per stage. If a supplement later increases the loss, the deductible is not applied again.

Two storms, two deductibles

A separate occurrence is a separate deductible. That cuts both ways:

• If damage from a June storm and a September storm are on the same roof, the carrier may want two claims and two deductibles.
• If the carrier assigns your damage to a storm outside the policy period, that is a denial dressed as a date. The storm record is how you answer it.

Establish the date of loss properly and early.

"We will cover your deductible"

You will hear this after every Colorado hailstorm, and the answer is no.

Colorado's roofing statute prohibits a roofing contractor from paying, waiving, rebating or absorbing an insurance deductible, however it is dressed up - a "storm discount," an "advertising allowance," free gutters, an inflated invoice with a credit at the end.

It is not a favor. The carrier is paying the loss on the understanding that you bore your share. A contractor who arranges for you not to has made the claim false, and it is your name on it.

The related protection in that same statute is worth knowing and is genuinely in your favor: where an insurer denies all or part of a roofing claim, you generally have a right to rescind the roofing contract and recover your deposit within a defined window. Check your roofing contract for the rescission language.

If you cannot pay the deductible

It happens, particularly with a percentage deductible on a large home or a small commercial building. The legitimate options:

• Finance the repair, with the insurance proceeds servicing it.
• Phase the work over time where it is safe to do so.
• Ask the contractor to bid the job more competitively - a lower job cost is legal; a rebated deductible is not.
• Make sure nothing is missing from the claim. On a large deductible it is worth confirming that code upgrades, overhead and profit, soft metals and matching were all scoped, because those move the recovery in a way the deductible does not.

That last one is where we usually end up. Send us the estimate and we will tell you whether the claim is complete before you decide whether it is worth pursuing.

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