If your renewal shows a wind and hail deductible written as a percentage instead of a dollar amount, the number is almost certainly larger than you think. A percentage deductible is calculated against the dwelling limit on your policy — not against the size of your claim, and not against what your house would sell for. On a home insured for $350,000, a 1 percent wind and hail deductible is $3,500.
The short version. Percentage deductibles apply per storm, with no annual cap — two hail events in one summer means paying it twice. And if your renewal added one, check whether it also changed how your roof gets settled. That second change is usually worth more money than the deductible itself.
How the math actually works
The standard industry endorsement (ISO form HO 03 12) says the insurer "will deduct an amount equal to ___% of the limit of liability that applies to Coverage A – Dwelling." That is the key sentence. Coverage A is the rebuild limit on your declarations page.
Two things follow that surprise people:
- The deductible does not scale with the claim. A $4,000 hail repair and a $90,000 roof replacement carry the same $3,500 deductible on a $350,000 home. Small and mid-size claims effectively disappear.
- It applies to more than the roof. Even though the amount is calculated from the dwelling limit, the deductible applies to any wind or hail loss under any of your property coverages — the house, other structures, your contents, and loss of use.
Here is what the common percentages look like on that same $350,000 dwelling limit:
| Deductible | You pay | On a $12,000 hail loss, insurer pays |
|---|---|---|
| $1,000 flat | $1,000 | $11,000 |
| 1% | $3,500 | $8,500 |
| 2% | $7,000 | $5,000 |
| 5% | $17,500 | nothing |
Percentages typically run from 1 to 5 percent, and some Midwest carriers now file 10 percent options. On a $350,000 home, 10 percent is a $35,000 deductible.
It applies per storm, not per year
This is the detail that costs Michigan homeowners real money, and it is where our situation differs from the coastal states most articles are written about.
In hurricane states, regulators generally require that a hurricane deductible apply only once per season, and named-storm deductibles are often written per season or per calendar year. Michigan has no such rule for wind and hail deductibles, and the standard endorsement contains no seasonal or annual limitation. Two separate hail storms in one Michigan summer means the percentage deductible applies twice.
Why this is happening now
The pressure is real, and it is mostly not about Michigan.
- Severe convective storms — thunderstorms, hail, straight-line wind — caused about $51 billion in U.S. insured losses in 2025, the third consecutive year above $50 billion, per the Insurance Information Institute. Hail alone can account for as much as 80 percent of those claims in a given year.
- Roofs absorb an estimated 70 to 90 percent of total insured residential catastrophe losses from hail.
- Roof replacement got dramatically more expensive. Verisk put the average U.S. residential roof replacement at $17,631 in 2025, up 33 percent against the prior four-year average.
- And the Midwest has the oldest roofs in the country — 17 percent are 31 years or older, versus 4 percent in the South.
To be straight with you about Michigan specifically: we are not a top-10 hail state. The 2025 NOAA storm data ranks Texas, Kansas, Oklahoma, Nebraska and Missouri well ahead of us; Michigan does not appear in the top ten. What has changed here is frequency of major weather generally — NOAA's billion-dollar disaster record for Michigan — a dataset retired in 2025 and frozen at 2024 — shows an average of 1.3 events per year since 1980, but 4.4 per year across 2020–2024. Carriers are deploying the same tools everywhere, including in states that historically did not need them.
The change that matters more than the deductible
If your renewal added a percentage deductible, check whether it also changed how your roof gets paid for. That is the bigger financial exposure and it gets far less attention.
Many carriers now settle wind and hail damage to roof surfaces on an actual cash value basis — depreciated for age — rather than replacement cost, or apply a payment schedule that reduces what they pay as the roof ages. Published thresholds from Midwest filings run roughly 10 to 16 years depending on carrier and shingle type. On a $17,000 roof, the difference between replacement cost and ACV can be many thousands of dollars.
Two developments to know:
- Federal mortgage rules loosened in March 2026. Fannie Mae Lender Letter LL-2026-03 now states that "roofs must be insured, but do not have to be insured on a replacement cost basis," reversing a 2024 full-replacement-cost requirement. That removes a guardrail that had been quietly protecting borrowers.
- Michigan pushed back on how deep ACV can cut. DIFS Bulletin 2024-26-INS, effective for personal lines homeowners and dwelling policies issued or renewed on or after July 1, 2025, requires that depreciation of non-tangible items — the bulletin defines these as "labor, taxes, fees, and overhead and profit" — be done only through a standalone endorsement that specifically identifies them, and that the endorsement be optional coverage offered "for a commensurate reduction in premium." It cannot be buried in a policy definition. As DIFS put it: "Nontangible items such as labor are not physical objects and do not deteriorate, age, or decline in value."
Separately, Fannie Mae caps the maximum acceptable deductible on a one-to-four-unit property at 5 percent of the property insurance coverage amount. If a carrier offers you a 10 percent wind and hail deductible and you have a conforming mortgage, that likely breaches your lender's guidelines.
One more Michigan protection worth knowing
If your carrier flagged your roof from an aerial photo, DIFS Bulletin 2025-12-INS (June 6, 2025) is directly on point. It states that "mere cosmetic roof issues, such as discoloration or streaking, are not valid grounds for policy cancellation or nonrenewal," that insurers using aerial imagery "should provide residents with the opportunity to challenge the aerial images or to correct confirmed roof damages before" adverse action, and that where imagery drives a cancellation or nonrenewal the insurer should say so, give you copies of the images, and let you respond.
The bottom line
A percentage deductible is not necessarily a bad deal — it can buy real premium savings, and for a homeowner with cash reserves and a newer roof it may be the right trade. What makes it a problem is finding out about it after a storm rather than before one. The number on your declarations page is the number you will write a check for, and on most Michigan homes it is several times larger than the flat deductible it replaced.
We are an independent agency in Lake Orion, and reading declarations pages is most of what we do. Send us yours and we will tell you exactly what your wind and hail deductible is, how your roof would be settled, and whether another of our carriers will write it differently. Review your Michigan home insurance, request a free comparison, or call (248) 693-6455. For the broader picture on rates, see why Michigan home insurance went up and whether homeowners insurance covers roof replacement.
Frequently Asked Questions
Is a 1% deductible based on my home's value or my claim?
Neither — it is based on your Coverage A dwelling limit, the rebuild figure on your declarations page. The standard endorsement deducts "an amount equal to ___% of the limit of liability that applies to Coverage A – Dwelling." On a home insured for $350,000, a 1 percent deductible is $3,500 regardless of whether the claim is $5,000 or $80,000.
Does a wind and hail deductible apply once a year or every storm?
Every storm. The standard endorsement contains no annual or seasonal limitation, and Michigan has no statute requiring one. Two separate hail events in one summer means the percentage deductible applies twice. The per-season protections that exist in hurricane states do not apply to Michigan wind and hail deductibles.
Can my insurer add a percentage deductible without telling me?
They must give notice in most cases, but there is an exception. MCL 500.2104 treats offering "less favorable terms or conditions" as a termination, which MCL 500.2123 says requires at least 30 days' written notice stating each specific reason. However, that definition excludes changes where the prior terms are no longer available from the insurer anywhere in Michigan — which is how most statewide deductible rollouts are structured.
How do I get a flat dollar deductible back?
Ask your agent whether your carrier still files a fixed-dollar wind and hail option — many do, and the percentage is simply the renewal default. If your current carrier has withdrawn flat deductibles statewide, the answer is to compare carriers, since they are not all making this change at the same time or at the same percentage.
Why did my roof coverage change from replacement cost to actual cash value?
Many carriers now settle wind and hail damage to roof surfaces on a depreciated basis once a roof reaches a certain age, commonly somewhere between 10 and 16 years depending on carrier and shingle type. Federal mortgage guidance loosened in March 2026, when Fannie Mae stated roofs need not be insured on a replacement cost basis. In Michigan, DIFS Bulletin 2024-26-INS limits how deep the cut can go: for policies issued or renewed on or after July 1, 2025, depreciation of labor, taxes, fees and overhead is permitted only through a standalone optional endorsement you elected in exchange for a lower premium.
Is Michigan a high-hail state?
No. Michigan does not appear in the 2025 top-ten hail states — Texas, Kansas, Oklahoma, Nebraska and Missouri lead by a wide margin. What has changed is overall severe weather frequency: NOAA's billion-dollar disaster data for Michigan, frozen at 2024 when the dataset was retired, shows an average of 1.3 events per year since 1980 but 4.4 per year across 2020 through 2024. Carriers are applying national underwriting tools here regardless of Michigan's individual hail ranking.