Why Your Insurance Deductible May Be 3X Higher Than You Think

Joe the roofer
Aug 7, 2025
3 min read

Updated: Aug 16, 2025

Texas homeowners are feeling the squeeze—and most don’t even realize it.

Published by: Good Guys Roofing – Trusted Roofing Experts in the DFW MetroplexLast updated: August 2025

Disclaimer:

The following article is for general informational purposes only and does not constitute legal advice or insurance claims advice. For guidance specific to your situation, consult a licensed insurance agent or legal professional.

A Quiet but Costly Change in Texas Insurance Policies

If you’re a Texas homeowner, chances are your property insurance premiums have increased in recent years. But what you might not have noticed is how your deductible—your out-of-pocket cost when filing a claim—has also skyrocketed, sometimes by 3X or more.

And it’s not just about rising premiums. It’s about how insurance companies are now calculating your coverage.

Real-Life Example: A Home in Keller, TX

Let’s say you own a 3,000 sq. ft. home in Keller. Here's what your insurance might’ve looked like just a few years ago:

2018 Insurance Breakdown

Market Value: $450,000
Land Value: $120,000
Dwelling Coverage (Structure): $330,000
Deductible (1%): $3,300

2025 Insurance Breakdown

Market Value: $675,000
Land Value: ~$200,000 (unchanged)
Dwelling Coverage (Structure): $675,000 (now based on market value)
Deductible (2%): $13,500

That’s a 409% Increase in Deductible.

Even though the house structure hasn’t changed and the land still can’t burn down, your deductible has ballooned from $3,300 to $13,500—largely due to:

The dwelling coverage being tied to market value, not rebuild cost
Deductible rates increasing from 1% to 2%

Why Are Insurance Companies Doing This?

1. Market-Based Coverage Shifts

Traditionally, homeowners insurance covered the cost to rebuild your home—not the full market value, which includes the land and the location’s real estate demand. But in recent years, some carriers have begun insuring homes based on their market value, driving up dwelling coverage totals (and therefore deductibles).

2. Inflation + Demand = Price Surge

North Texas has seen housing values explode, with material and labor costs also increasing. While insurers use this to justify higher coverage limits, it may overestimate actual rebuild costs—leaving homeowners with inflated premiums and deductibles.

3. From 1% to 2% (or More) Deductibles

It doesn’t sound like much, but 2% of a $675K dwelling is vastly different than 1% of a $330K structure. When percentage-based deductibles increase in tandem with rising valuations, your claim-triggering cost can silently multiply.

What Does This Mean for You?

✅ You’re Probably Underestimating Your Financial Risk

You may be paying more and getting less than you think. If a major storm hits and you have to file a claim, you might be facing a deductible that’s four figures higher than you expected.

✅ Premiums Are Up—But So Is Your Out-of-Pocket Burden

The focus is often on rising premiums, but your deductible is a bigger piece of the puzzle when disaster strikes.

✅ Coverage Gaps Could Be Lurking

Even with higher insured values, you might still face rebuild shortfalls—especially if your policy doesn’t include extended or guaranteed replacement cost provisions.

What Can You Do? (Without Giving Legal Advice)

While we can’t offer insurance or legal advice, we do encourage all Texas homeowners to:

Review your declarations page annually
Ask your licensed agent:
- Is my deductible based on rebuild cost or market value?
- Can I switch to a flat-dollar deductible?
- Is extended or guaranteed replacement cost included?
- Am I over-insured based on land value?

Final Thoughts from the Field

As roofing professionals serving DFW homeowners for over a decade, we've seen firsthand how these changes have affected policyholders—especially after severe storms.

Understanding your deductible is just as important as knowing your coverage limit. And with policy trends shifting quickly, staying informed is key to protecting your investment.