Jun 8, 2025
Texas Commercial Property Insurance Deductibles Explained (AOP, Wind/Hail, Named Storm)
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The deductible you agree to in your policy can decide whether a claim is manageable or devastating. In Texas, where wind and hail are frequent, it’s not enough to know you’re “covered” — you need to understand how deductibles apply.
This guide breaks down the different types of deductibles commercial property owners face — AOP, Wind/Hail, and Named Storm — with examples tailored to Texas real estate.
“I thought I had a $5,000 deductible — until the carrier applied a 2% wind/hail deductible on my $5M property. That meant $100,000 out of pocket.”
Robert B.
Shopping Center Owner - Austin, TX
Why Deductibles Matter
Deductibles aren’t just fine print — they’re the first dollars out of your pocket when disaster strikes. A well-structured program balances affordability with risk tolerance. A poorly designed program can leave you funding six figures before coverage even starts.
Types of Deductibles in Texas Commercial Property Policies
All Other Perils (AOP) Deductible
Applies to most losses outside of wind/hail or named storms — fire, theft, vandalism, water damage. Usually a flat dollar amount (e.g., $5,000 or $10,000).
Wind/Hail Deductible
Separate from AOP. In Texas, these are often a percentage of the insured value (1–5%). On a $10M property, a 2% wind/hail deductible = $200,000 out of pocket. Essential for shopping centers, multifamily, and gas stations with large roofs or canopies.
Named Storm Deductible
Used on coastal policies for hurricanes and tropical storms. Functions like wind/hail but triggered only by a declared storm. Common along the Texas Gulf Coast.
How Deductibles Impact Real Claims
A $5M apartment complex with a 2% wind/hail deductible = $100,000 retained by the owner before coverage starts.
A gas station with a $2,500 AOP deductible for a fire may be manageable — but that same station might owe $50,000 if a hailstorm damages the canopy.
Shopping centers often discover their deductible exceeds annual NOI — making business income coverage meaningless if it never triggers.
Strategies to Manage Deductibles
Deductible Buy-Downs: Some carriers offer buy-down policies to reduce wind/hail deductibles.
Higher AOP, Lower Wind/Hail: Balancing deductible structures can optimize cash flow.
Reserve Planning: Treat large deductibles as part of your risk management budget.
Portfolio Structuring: Owners with multiple properties may use blanket deductibles for efficiency.
Key Takeaways
AOP covers everything except wind/hail or named storms.
Wind/hail deductibles in Texas can reach hundreds of thousands.
Named storm deductibles apply along the coast.
Poorly structured deductibles can wipe out cash flow before coverage responds.
Strategies like buy-downs and blanket structures help mitigate exposure.
Final Word
Deductibles decide how much you risk before coverage kicks in. At Primesure, we walk clients through their options, model real scenarios, and structure programs that balance cost with protection.
