Selling a Lubbock House With Hail Damage or an Open Insurance Claim
Lubbock is one of the most hail-struck places in Texas. The question nobody answers clearly is what happens to the insurance money when you sell before the repair is done.
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Before you read this
Why this comes up so often here
Lubbock County sits in one of the most active hail corridors in Texas, and a bad spring can put a new roof claim on an entire street at once. So a large number of Lubbock houses are, at any given moment, sitting with hail damage that has been inspected, maybe paid on, and not yet repaired.
Then life moves on — a job, an inheritance, a divorce, a tenant leaving — and the house needs to be sold with the claim still open. That is a genuinely confusing position, and the advice available online is mostly written by roofers who want to do the repair.
The part that costs people money: recoverable depreciation
Most Texas homeowner policies with replacement cost coverage do not pay the full amount up front. They pay actual cash value first — the replacement cost, minus depreciation for the age and wear of the roof, minus your deductible. The rest, called recoverable depreciation, is held back.
You get that held-back money only when you actually do the work and send the insurer proof: a final invoice showing the repair was completed and paid for.
If the roof is never repaired, the recoverable depreciation is generally never paid. On an older roof the withheld portion can be a large share of the claim. That is the single most expensive thing people do not know when they sell a storm-damaged house, and it is the reason a decision about repairing versus selling as-is is worth actual arithmetic rather than a guess.
Check your own policy or ask your adjuster which kind you have. Some policies are actual cash value only, in which case there is no holdback to lose.
So who keeps the money?
The general principle is that the claim belongs to the person who was insured when the damage happened. It does not automatically transfer to a buyer along with the deed, because your policy is a contract between you and your insurer about a loss that already occurred.
But there are three complications, and all three are worth raising early rather than at closing.
- Your mortgage company. If there is a loan, the lender is normally named on the policy and claim checks are often made payable to you and the lender together. Lenders frequently hold the funds and release them against completed work, and at payoff they will want the claim resolved.
- The contract you sign. Who keeps unrepaired claim proceeds is negotiable and should be written down. A buyer who is pricing the house as damaged is paying you less because the roof is bad; a buyer who also expects your claim money is being paid twice. Get it explicit.
- Damage that happens between contract and closing. That is a different situation again, and standard Texas contract forms address casualty loss during that window. Ask your title company or attorney.
None of that is legal advice, and your policy language controls. Ask your insurer directly, in writing, what happens to your claim if the property sells before repairs.
Deductibles are bigger than people remember
Many Texas policies now carry a separate wind and hail deductible expressed as a percentage of the dwelling coverage rather than a flat dollar figure — commonly in the range of one to five percent. On a house insured for $300,000, a two percent wind-and-hail deductible is $6,000 before the insurer pays anything.
That is often why a claim that seemed worth filing turns out not to be, and why some hail damage in Lubbock simply never gets repaired. Look at your declarations page for the wind/hail deductible specifically; it is frequently different from the one on the rest of the policy.
You still have to disclose it
Texas requires most residential sellers to give the buyer a written Seller’s Disclosure Notice, and known damage and prior claims belong on it. Selling ‘as-is’ does not remove that obligation — it changes who pays for repairs, not whether you have to be honest about the condition.
We would rather you disclose everything. A buyer who knows about the hail damage and prices it is a buyer who does not come back later with a complaint. More on what Texas requires you to disclose.
What we do with a storm-damaged house
We buy them in that condition, and we price the roof into the offer rather than asking you to fix it first. What we ask for up front is the honest picture: whether a claim was filed, whether it was paid, whether any of the money was spent, and whether the insurer has a deadline running.
Two situations where we will tell you to keep the house instead. If your claim is approved on a replacement cost policy and the recoverable depreciation is substantial, repairing and then selling normally nets more. And if the damage is cosmetic and the house is otherwise retail-ready, a listing usually beats us.
Common questions
If I sell my house before fixing hail damage, who gets the insurance money?
As a general rule the claim belongs to whoever was insured when the damage occurred, and it does not transfer automatically with the property. But your mortgage lender may be named on the check, and your purchase contract can assign the proceeds either way, so it should be written into the contract rather than assumed. Ask your insurer in writing what your policy says.
What is recoverable depreciation and can I lose it?
On a replacement cost policy the insurer pays actual cash value first and holds back the depreciation, releasing it only after you complete the repair and send proof. If the repair is never done, that held-back amount is generally not paid. On an older roof it can be a large share of the claim.
Will you buy a Lubbock house with an open hail claim?
Yes. We buy storm-damaged houses in current condition and price the roof into the offer. Tell us at the start whether a claim was filed, whether it paid, and whether any of the money has been spent, because all three change the arithmetic.
Why is my wind and hail deductible so high?
Many Texas policies use a percentage of the dwelling coverage for wind and hail rather than a flat amount, often somewhere between one and five percent. On a house insured for $300,000 a two percent deductible is $6,000. Check your declarations page — the wind/hail deductible is frequently different from the rest of the policy.
Do I have to tell the buyer about old hail damage?
Texas requires most residential sellers to provide a written Seller's Disclosure Notice, and known damage and prior claims belong on it. Selling as-is affects who pays for repairs, not whether you must disclose what you know.
Are you insurance adjusters?
No. We are real estate investors. We are not adjusters, public adjusters, roofers, attorneys, or your insurer, and nothing here is insurance or legal advice. Your policy language controls — ask your own insurer or agent.
A last word on what we are
Want to talk about your situation?
Send the address and the condition. If a direct sale is not your best move, we will say so.