Specialty · Insurance Term
Deductible Buy-Down (Wind/Hail Buyback)
Definition
A deductible buy-down is a separate policy that pays part of a large deductible on your main property policy, usually a percentage wind, hail or named-storm deductible. It lets you keep a high-deductible main policy while limiting what you would actually pay out of pocket after a storm.
In Plain English
When a main policy carries a high percentage deductible, such as 5% for named storms, the owner's share of a loss can be very large. A buy-down policy is written to fill much of the gap between that deductible and a smaller amount the owner is comfortable paying.
Buy-downs are usually written by a separate insurer and have their own terms, limits and exclusions. They typically track the main policy's coverage, but not always. They also have their own retention, so the owner still pays something.
Whether a buy-down makes sense depends on its price compared with the deductible gap it closes. Sometimes it costs less than lowering the deductible on the main policy, and sometimes it doesn't. It comes up most for coastal and hail-exposed properties with a named storm deductible or a wind and hail deductible.
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Example
Hypothetical and simplified: An apartment complex insured for $10 million has a 5% named-storm deductible, or $500,000. A buy-down policy covers the deductible above a $100,000 retention. After a hurricane causes $1 million of covered damage, the main policy pays about $500,000 and the buy-down may pay up to $400,000, leaving the owner with $100,000.
Why It Matters for Texas Property Owners
Along the Texas coast and in hail-prone areas, wind and named-storm deductibles of several percent are common, so buy-downs often come up for Gulf Coast apartments, hotels and retail centers. If part of your wind coverage is with TWIA, ask how a buy-down would work alongside it.
What to Watch For
- Compare the buy-down's cost with the cost of simply lowering the main policy's deductible.
- Confirm the buy-down covers the same perils and locations as the deductible it is meant to fill.
- Check the buy-down's own retention and limits, including any per-building limits.
- Ask how claims are handled and whether the buy-down waits on the main insurer's adjustment.
Last updated October 14, 2026 · Primesure editorial team · How We Write