How Do Wind and Hail Deductibles Work for Texas Hotels?

Most Texas hotel property policies do not use a flat dollar deductible for wind and hail. They use a percentage of the insured value, usually somewhere between 1% and 5%. On a hotel insured for $12 million, a 2% deductible means the first $240,000 of a hail claim is yours. Many owners do not realize that until the adjuster is on the roof.

Below is how these deductibles work, why they have become standard in Texas, and what you can do before the next storm season to keep a covered loss from turning into a cash problem.

Why do Texas hotels have percentage deductibles for wind and hail?

Because Texas has more hail claims than any other state, and carriers price for that. In the National Insurance Crime Bureau's study of 2016 through 2018 claims, Texas had more than twice as many hail claims as the next state, and San Antonio was the top city in the country. The weather has not slowed down since. State Farm alone reported paying $1.4 billion in Texas hail claims in 2025, more than in any other state.

A percentage deductible shifts the frequent, smaller storm losses back to the owner so the carrier can keep offering capacity for the large ones. For a hotel, where the roof, HVAC units, and exterior finishes represent a large share of the building's value, that shift is significant.

How is a percentage deductible calculated?

The deductible is a percentage of the insured value, not a percentage of the claim. That distinction is the one that catches people.

Here is a simple example. Your hotel building is insured for $12,000,000 with a 2% wind and hail deductible. A hailstorm causes $310,000 in roof and exterior damage.

• Deductible: 2% x $12,000,000 = $240,000
• Claim payment: $310,000 minus $240,000 = $70,000
• Your share: $240,000

If the same storm caused $200,000 of damage, the carrier would pay nothing. The loss would sit entirely inside the deductible.

Three details in the policy language decide how large that number gets:

• What value the percentage applies to. Some policies apply it to the value of the damaged building only. Others apply it to the total insured value at the location, which can include business personal property and business income. On a property with multiple buildings, that difference can double the deductible.
• Whether there is a minimum. Many forms read like "2% subject to a $100,000 minimum." The larger of the two applies.
• Whether it applies per occurrence. Two separate storms in one season can mean two deductibles.

Is a wind and hail deductible the same as a named storm deductible?

No. A named storm deductible applies only when the damage comes from a storm the National Weather Service has named, which mostly matters for hotels closer to the coast. A wind and hail deductible applies to any wind or hail event, including the spring storms that do most of the damage in Central Texas. Some policies carry both. If your hotel is in one of the coastal counties where the Texas Windstorm Insurance Association writes coverage, the structure looks different again. For inland properties in Guadalupe, Comal, Bexar, and Hays counties, the wind and hail deductible is the one that matters.

Does the deductible apply to business income too?

It can. Some policies apply the percentage only to direct physical damage. Others combine property and business income into one calculation. If a storm forces you to close a wing for repairs, read whether lost room revenue is subject to its own waiting period, the percentage deductible, or both. This is worth confirming before a loss, not during one.

What else in the property policy affects a hail claim?

The deductible is only one piece. A few other provisions often show up on Texas hotel policies:

• Cosmetic damage exclusions. These exclude hail damage that affects the appearance of a roof or metal surface but not its function. Dented metal roofing or HVAC fins may not be covered at all.
• Roof payment schedules. Some policies pay roofs on actual cash value or on a depreciation schedule tied to roof age, rather than full replacement cost.
• Underinsurance. If the building limit is below the true cost to rebuild, a coinsurance penalty can reduce the claim further. We covered this in our article on appraised value versus rebuild value.

How can a hotel owner manage a large wind and hail deductible?

You have more options than simply accepting the deductible your renewal offers.

• Price the alternatives. Ask for quotes at 1%, 2%, and 5%, and with a flat dollar deductible if any market will offer one. Then compare the premium difference to the deductible difference. Sometimes the savings are real. Sometimes the higher deductible saves very little.
• Look at a deductible buy-down policy. These are separate policies that cover part of a percentage deductible. They are not right for every hotel, but for an owner who cannot absorb a $250,000 hit, they are worth pricing.
• Reserve for it. If you keep the higher deductible, set aside cash or a credit line equal to at least one full deductible. Lenders sometimes require this anyway.
• Invest in the roof. Roof age, material, and documented maintenance all affect how underwriters treat your property. Impact-resistant materials and recent inspections strengthen your position at renewal.
• Document condition now. Dated photos and inspection reports of the roof and exterior make it easier to separate new storm damage from older wear when a claim happens.

Frequently asked questions

What is a typical wind and hail deductible for a Texas hotel?

Percentage deductibles between 1% and 5% of insured value are common in Texas, often with a dollar minimum. The exact number depends on the carrier, the property's location and construction, and the roof.

Can I get a flat deductible for wind and hail?

Sometimes, usually at a higher premium. Availability depends on the market and the property. It is worth asking for at every renewal.

Does my franchise or lender limit my deductible?

Often, yes. Many franchise agreements and loan documents cap the deductible an owner can carry. Check both before agreeing to a higher one.

Know your number before the next storm

The time to find out what your wind and hail deductible really costs is before spring, not after. If you own or operate a hotel in Guadalupe, Comal, or the surrounding counties, send us your current property declarations page and we will show you what your deductible would be on a real claim and what your options are to change it. Call 830-303-8300 or visit our hotel insurance page.