What is Deductible Buy Back Insurance
Deductible buy back coverage is a second insurance policy. A deductible buy back policy is in addition to your primary (overlying policy). A deductible buy back policy can reduce your deductible to as low as $2,500 when a covered loss occurs.
Get a QuoteWho Should Consider This Coverage?
Deductible buy back coverage can be a good fit for homeowners, property owners, businesses, homeowners associations, real estate investors and anyone who wants a predictable financial plan before a major loss occurs. Deductible buy back coverage is available for wind, hail, flood, fire or earthquakes.
Quick Example of how deductible buy back works
In this example, deductible buy back coverage reduced the insured’s net out-of-pocket responsibility from $20,000 to $5,000.
July 2026 Example of Wind/Hail Deductible Savings
| Current Carrier & Deductible | Current Carrier Diff Ded | Current Carrier Diff Ded | Current Carrier Diff Ded | |
|---|---|---|---|---|
| TIV – Overlying Coverage or Value | $1,215,000 | $1,215,000 | $1,215,000 | $1,215,000 |
| Comparison Deductible Percentage | 1% | 5% | 3% | 3% |
| Comparison Deductible Amount | $12,150 | $60,750 | $36,450 | $36,450 |
| NEW Deductible after buy back | Current | $5,000 | $5,000 | $10,000 |
| Deductible Savings vs Current | – | $7,150 | $7,150 | $2,150 |
| Premium Overlying Coverage | $10,000.00 | $3,849.79 | $4,335.03 | $4,335.03 |
| Deductible Buy Back Premium | – | $3,764.51 | $2,464.92 | $1,986.62 |
| Total All Premiums (Overlying + DBB) | $10,000.00 | $7,614.30 | $6,799.95 | $6,321.65 |
| Premium Savings | Baseline | $2,385.70 | $3,200.05 | $3,678.35 |
Call Today to Get Started
Get a quote, get appointed, get quoting, start writing!
What is Parametric Insurance
Parametric Insurance pays based on a predefined trigger or measured event, such as wind speed, hail size, rainfall amount, earthquake intensity, or other objective data point. Rather than waiting for a traditional damage adjustment the payment is made based on the triggering event and terms, usually within days. Parametric is not dependent on any other coverage and Parametric Insurance can even be considered a balance sheet item for protection against loss.
Get a QuoteWho Should Consider This Coverage?
Parametric insurance is a good fit for property owners, businesses, homeowners associations, real estate investors, and insureds whose business or property is exposed to wind, hurricane, flood, fire, earthquake, natural disasters or other events that may shut your business down or stop revenue. It is useful for customers who want a more predictable financial plan before a major loss occurs.
The History of Deductible Buy Back
Deductible Buy Back is not a new or experimental idea. The concept is documented in U.S. insurance records from the 1990s and developed alongside the growth of large catastrophe deductibles.
This is an “in use by” timeline, not a claim of the absolute first policy ever written.
Hurricane Andrew Accelerates Percentage Catastrophe Deductibles
After Hurricane Andrew, insurers in coastal states increasingly used percentage-based hurricane and windstorm deductibles.
Percentage deductibles shift a larger portion of catastrophe loss to the insured and can create substantial out-of-pocket exposure.
Federal Court Record Documents Deductible Buyback Placement Activity
In later litigation involving 1994 renewal negotiations, a broker was described as seeking insurance from other companies to cover a primary policy deductible.
The court repeatedly referred to the concept as a “deductible buy-back” policy.
A State Regulator Formally Recognizes Property Catastrophe Deductible Buyback
California’s first surplus-lines Export List, adopted in December 1996, included “Homeowners Earthquake—Excess Limits or Deductible Buyback.”
This provides regulatory evidence that property catastrophe deductible buyback was already a recognized specialty insurance product.
Public Insurance Filings Show Deductible Buy-Back as an Active Program
RLI Corp.’s SEC-filed annual reports listed “deductible buy-back” among smaller insurance programs and reported earned premium for the group.
The filing demonstrates that deductible buyback had moved beyond a theoretical concept and was part of active insurance operations.
Deductible Buyback Remains on California’s Surplus-Lines Export List
California’s 2004 Export List continued to identify “Homeowners Earthquake—Excess Limits or Deductible Buyback,” showing continued recognition of the coverage in the specialty/nonadmitted market.
Standalone Deductible Buyback Policy Used With a High-Deductible Property Program
A 2016 policy later reviewed by the U.S. Court of Appeals for the Fifth Circuit was expressly described as a separate deductible buyback policy.
It was purchased because the primary property policy carried a high deductible.
Federal Appellate Court Explains Deductible Buyback
The Fifth Circuit explained that a deductible buyback policy may cover all or a portion of the deductible required by a primary policy.
This can reduce the insured’s out-of-pocket cost, subject to the buyback policy’s covered perils, terms and conditions.
Specialty Coverage Designed to Reduce Retained Risk From Large Deductibles
The modern Deductible Buy Back policy is designed to address a specialized coverage gap: the portion of a large deductible the insured would otherwise retain after a covered loss.
It can be particularly useful with large wind, hail and catastrophe deductibles.
Deductible Buy Back Isn’t New. The Need for It Has Grown.
As property deductibles have become larger, especially for catastrophe exposures, Deductible Buy Back provides another way to help make an insured’s retained risk more manageable.
Documented History
Historical information is provided for educational purposes. Actual coverage is governed by the policy, endorsements, underwriting terms and applicable insurance laws.
Call Today to Get Started
Get a quote, get appointed, get quoting, start writing!