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Mortgage Rates Near 7% Again: Why P&I Calculators Are Misleading Buyers in 2026
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Great questions, Elmoustahyi.
The #1 mistake: shopping the premium while ignoring the deductible structure.
Two quotes can show nearly the same annual premium and be completely different products. The classic trap is the separate wind or hail deductible — in coastal states it’s often 2% to 5% of the dwelling coverage, not a flat dollar amount. On a $400,000 home, a 5% wind deductible means $20,000 out of pocket before insurance pays a dime on a hurricane claim. Buyers see the lower premium, feel smart, and have no idea what they actually bought until the worst day of their homeownership.
So the budget number looks right and the protection is hollow. That’s worse than overpaying.
The question to ask the agent:
“Walk me through every deductible on this quote — including any separate wind, hail, or hurricane deductibles — and tell me exactly what I’d pay out of pocket on a typical claim.”
And a strong second question: “Is there anything about this property that could change my rate after your company’s inspection?” That one surfaces the conditional-bind risk before it becomes a surprise letter.
Ask those two, and the number going into your calculator gets a whole lot more real.
— Ken Coury, Coury Insurance Group
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This is gold, Ken. Thank you for this detailed response.
The "Deductible Trap" is something almost every first-time buyer misses. They look at the premium, feel relieved it's within budget, and then get hit with a 2% or 5% wind deductible when a storm hits. Your point about asking the agent specific questions during the inspection period is exactly the kind of practical advice buyers need.
Since you are in the industry, I'd love to ask: Do you think insurance companies will start making deductibles more transparent on the initial quote pages to help buyers compare apples to apples? Or will it remain buried in the fine print?
Also, if you have any suggestions on how to improve the insurance section of my True Cost Calculator (to make it more useful for agents like you), I would genuinely love to hear them.
Thanks again for the invaluable insights.-
This reply was modified 3 weeks ago by Elmoustahyi Abdallah.
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This reply was modified 3 weeks ago by Elmoustahyi Abdallah.
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This reply was modified 3 weeks ago by
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Transparency in home insurance is essential. The monthly premium represents the ongoing cost, while the deductible constitutes the out-of-pocket expense incurred when filing a claim. Both factors are critical when evaluating a home’s affordability.
Presenting wind and hail deductibles as dollar amounts enhances clarity. For instance, a 2% wind deductible on a $400,000 home obligates the owner to pay $8,000 out of pocket before insurance coverage applies. This amount may represent a substantial expense for prospective buyers.
An effective mortgage affordability calculator differentiates the purchase price from the insured replacement cost, displays multiple deductible options, and enables side-by-side comparison of insurer quotes. Additionally, it should clarify that premiums and coverage are subject to change following underwriting or property inspection.
Comprehensive housing affordability extends beyond principal, interest, taxes, and insurance by also accounting for the financial risks that homeowners may encounter. Providing buyers with this information prior to closing enables informed decision-making and helps prevent unexpected expenses.
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This is incredibly valuable feedback, Tina. Thank you.
You’ve highlighted a crucial gap in most calculators: the difference between “Market Value” and “Insured Replacement Cost.” A $400k home might cost $500k+ to rebuild in today’s market due to material and labor costs, and buyers need to see that gap.
I love your idea of adding a “Side-by-Side Insurer Quote Comparison” and displaying deductibles in both percentage and dollar amounts. This is exactly what a modern calculator should do.
I’m going to take your suggestions and work on updating my True Cost Calculator to include these features. Your insights are helping me build a better tool for buyers and agents.
Thanks again for the masterclass in insurance transparency!
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This reply was modified 2 weeks, 2 days ago by Elmoustahyi Abdallah.
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This reply was modified 2 weeks, 2 days ago by Elmoustahyi Abdallah.
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This reply was modified 2 weeks, 2 days ago by Elmoustahyi Abdallah.
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This reply was modified 2 weeks, 2 days ago by Elmoustahyi Abdallah.
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This reply was modified 2 weeks, 2 days ago by
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