Ask a host what their deductible is and you will usually get a clean number. A thousand dollars. Twenty-five hundred. They say it with confidence, because it is written right there on the policy.
On a lot of properties, that number is only part of the story. And on a coastal property, it may not be the number that applies the day you need to file.
A deductible is not always one figure. It can be written as a percentage, which reads small and lands large. And many policies carry a second deductible, a separate one for wind or named storms, that is bigger than the first and applies to the exact event a coastal property is most likely to face. The figure that matters is the one attached to the loss you are most likely to have. Most hosts have never done that math.
The percentage that reads small and lands large
Plenty of policies, especially on higher-value and coastal homes, set the deductible as a percentage of your dwelling coverage rather than a flat dollar amount. On the declarations page it looks modest. Two percent. Five percent. Easy to skim past.
Run the number. Five percent of a $600,000 dwelling limit is $30,000. That is what comes out before the carrier pays anything. The word deductible did not change. The number behind it did, by an order of magnitude. A percentage is not a small deductible. It is a large one wearing a small label.
The second deductible most coastal hosts don't know they have
In hurricane-prone states, and that includes much of the coast where short-term rentals cluster, policies commonly carry a separate deductible for hurricanes, named storms, or wind. It is usually a percentage, and it usually applies instead of your standard deductible when the loss comes from one of those events.
So the $2,500 you remember is your all-other-perils deductible. It covers the kitchen fire and the burst pipe. The storm deductible is the larger percentage, and the storm is the one thing a coastal property is most likely to face. You have two deductibles. The bigger one is reserved for the most likely disaster.
In one audit, an owner on the coast told me their deductible was $2,500. They were right, for most losses. Their dwelling coverage was $600,000, and buried on the declarations page was a separate named-storm deductible of five percent.
A named storm came through and did $90,000 in damage. The five percent named-storm deductible applied, not the $2,500. Five percent of $600,000 is $30,000. The carrier paid sixty. The owner was responsible for $30,000 out of pocket, twelve times the number they had carried in their head. And the property sat offline through the repairs, so the income stopped at the same moment the large bill arrived. The figure they had planned around was never the figure that applied.
Why this hides in plain sight
None of this is hidden, exactly. Both deductibles are printed on the declarations page. The percentage is right there. The separate wind line is right there. It is disclosed in the technical sense and invisible in the practical one, because almost nobody converts the percentage to dollars or notices there are two until a storm makes them. The policy looks complete and affordable right up to the loss that reveals the real number.
What proper looks like
Knowing your deductible means knowing it in dollars, for each peril, before the season starts. A percentage deductible is not automatically wrong. Sometimes accepting a higher one lowers your premium meaningfully, and that can be a sound trade. But it should be a choice you made on purpose, sized to cash you could put your hands on, not a default you discover at the worst time.
What to do
Find your declarations page and locate every deductible on it. There is often more than one. For each, convert the percentage to a dollar figure using your dwelling coverage amount, not your home’s market value or the size of the claim.
Identify which deductible applies to wind, hurricane, and named storms, and confirm whether your location triggers it. On the coast, treat that one as your real deductible, because it is the one most likely to apply.
Make sure that dollar figure is one you could cover in cash, on top of losing income while the property is down. If it is not, that is a conversation to have before the season, not in the middle of a claim.
The goal is not a lower deductible for its own sake. It is no surprises. The number you carry in your head should be the number that shows up when you file. Right now, for a lot of coastal hosts, those are two different numbers.
If you are not sure which deductibles are on your policy or what they come to in dollars, start with a free Risk Score.
Operator details in this article are anonymized and shared for educational purposes. Deductible structures vary by policy, carrier, and state. Confirm your own terms with a licensed advisor.