Understanding Hail Damage and How to Handle It

Hail can wreak havoc on your home, damaging roofs, breaking windows, and causing costly water damage. In 2023, hail incidents reached new records, with hailstones 2 inches or more in diameter striking the U.S. on 141 days, according to CoreLogic data. Homeowners insurance typically covers hail damage, but before filing a claim, it’s essential to consider repair costs, potential impacts on insurance premiums, and alternative ways to pay for repairs.

Is Hail Damage Covered by Homeowners Insurance?

Standard homeowners insurance usually covers your home’s structure and personal possessions against hail damage, but there may be exceptions based on your location. Hail is often part of thunderstorms or windstorms, which can occur almost anywhere, so home insurance generally pays for hail damage. This includes repairing or replacing your home’s structure, personal belongings, and freestanding structures like sheds, garages, and fences. Additional living expenses may also be covered if your home is deemed uninhabitable during repairs.

However, in regions where severe windstorms are common, home insurance may not cover wind or hail damage. High-risk areas often have state-run insurance programs that offer separate wind and hail coverage for homeowners who can’t find it elsewhere. These stand-alone hail policies can be expensive. For instance, in Texas, wind and hail coverage can cost around $2,000 annually. Given that the average hail claim costs $12,913, the expense might be justified.

Remember, filing a home insurance claim means you’re responsible for a deductible, which is the amount subtracted from any claim payout. This deductible can be a flat dollar amount, like $1,000, or a percentage of your home’s dwelling coverage, typically ranging from 1% to 5%.

Does Homeowners Insurance Cover Rain and Wind Damage?

Hailstorms are often accompanied by rain, wind, or lightning, which are usually covered under your homeowners insurance policy. Generally, insurance pays to replace or repair your home’s structure, contents, and stand-alone structures on the property if they’re damaged by rain, wind, or lightning.

However, there may be exceptions. In high-risk regions, windstorm coverage might require separate insurance. While water damage from above (rain, snow, or ice) is typically covered by home insurance, water damage from below (such as burst pipes) may not be. For example, roof leaks after a heavy rainstorm are generally covered, but a flooded basement usually isn’t. For that, you’d need flood insurance.

Should You File a Claim for Hail Damage?

Filing a claim for hail damage could increase your premiums, and any deductible will be subtracted from your claim payout, so you should think carefully before filing a claim.

When you file a home insurance claim, you’ll lose any insurance discounts you may have enjoyed from going claim-free. Be especially cautious if you or a previous homeowner have recently filed an insurance claim on your home. Prior claims appear in the Comprehensive Loss Underwriting Exchange (CLUE) database for seven years. Insurers review the CLUE when setting insurance premiums; a record of claims could mean higher rates. You can review your CLUE report for free once every 12 months to check for past claims.

The size of your deductible can also determine whether filing a claim is worthwhile. Unless repairs cost significantly more than your deductible, you may want to pay the cost out of pocket to avoid having an insurance claim on your record.

Suppose you had hail damage costing $12,913. If you have a flat $1,000 deductible, for instance, insurance would pay $11,913, so filing a claim may make sense. On the other hand, if you have a 5% deductible on a home insured for $250,000, insurance would only pay $413; you’d have to cover the remaining $12,500 (5% of $250,000).

Not sure what to do? Confirm what types of hail damage your home insurance covers and any caps on coverage. Get repair estimates from a few licensed contractors. Then consider any recent claims history and do the math to decide if filing a claim makes financial sense.

How Much Does Hail Damage Cost?

The cost of repairing hail damage depends on several factors, including the extent of the damage, your home’s size, and the materials used. Small repairs, such as fixing gutters or flashings, can sometimes be done for under $200, especially if you DIY. Here’s the average cost of typical hail damage repairs, according to home improvement site Angi:

• Roof repair: Average $4,250; can range from $300 to $32,500
• Full roof replacement: $5,890 to $12,700
• Concrete patio repair: $50 to $800
• Wooden deck repair: $860 to $3,400
• Storm window repair: $90 to $400 per window
• Mold remediation from water damage: $1,500 to $9,000

Tips for Paying for Hail Damage

If you’d rather not file an insurance claim, consider these other ways to pay for hail damage:

Emergency Fund

If you have an emergency fund, now is the time to use it. By paying cash for hail repairs, you’ll avoid potentially costly interest charges and may even qualify for discounts with contractors. After covering repairs, review your budget to cut spending so you can replenish your emergency savings quickly.

Home Equity Loan

A home equity loan lets you borrow against the equity in your home, receive a lump sum, and make fixed monthly payments on the loan, typically for five to 30 years. Home equity loans usually have lower interest rates than credit cards or unsecured loans. However, because they reduce your equity in your home, it will take longer to pay off your mortgage. Since a home equity loan uses your home as collateral, you could lose your home if you can’t make your loan payments.

Home Equity Line of Credit (HELOC)

Like a home equity loan, a HELOC uses equity in your home as collateral for a line of credit. As with a credit card, you can borrow up to your HELOC’s credit limit, pay it back, and borrow again as necessary until the credit line’s “draw period” ends. At that point (typically after 10 years), you’ll need to repay the loan plus interest, and payments may be high. Although HELOCs offer a flexible option for borrowing large sums, failing to repay the loan could put your home at risk.

Credit Cards

With the average annual percentage rate (APR) on credit card balances at 22.75% as of November 2023, according to the Federal Reserve, think carefully before using a credit card to pay for hail repairs. Unless you can pay the balance in full when it’s due, interest could quickly snowball. However, using an introductory 0% APR credit card can give you extra time to pay off your repairs without accruing interest on your balance. Avoid maxing out the card and try to keep credit utilization under 30%, or your credit score could suffer.

Personal Loan

Personal loans generally don’t require collateral and usually have lower interest rates than credit cards. (Average APRs on personal loans were 12.35% as of November 2023, the Federal Reserve reports.) Interest rates can be fixed or variable, and loan terms can range from six months to seven years. Although interest rates for personal loans are generally higher than for HELOCs or home equity loans, you won’t have to worry about losing your home if you default.

Government Disaster Assistance

If your hail damage is part of a larger natural disaster, such as a federally designated hurricane, you may qualify for state or federal government assistance to pay for repairs or rebuilding. Visit the Federal Emergency Management Agency (FEMA) website for more information about disaster relief. Contact your state’s emergency management agency to see if they provide any financial assistance.

The Bottom Line

To ensure your home is protected from hail, talk to your insurance agent and compare home insurance policies to get the coverage you need. Paying out of pocket to repair hail damage might make more financial sense than filing an insurance claim. Whether you’re shopping for insurance or exploring repair financing options, maintaining good credit can help save you money. Check your credit score before applying for insurance, credit cards, or loans. Making on-time payments and reducing credit utilization can help increase your credit score, which can translate into lower insurance premiums and loan APRs.

For any mortgage service needs, O1ne Mortgage is here to help. Call us at 213-732-3074 to speak with one of our expert loan salespersons. We are committed to providing you with the best service and ensuring your home is protected and well-financed.