This clause was purported to be introduced to keep insureds from reoprting small events that did not exceed the decutible amount. My first years in adjusting it was $50.00 on auto collision and $0 on all auto perils. $50.00 or $100.00 for Windstorm, hurricane or hail, ONLY not fire, lightning or the other EC perils.
As we are aware today it is on all perils and ranges down from $25 -50K on commercial to $10,000 on any peril home homeowners or up to 5% of the insured amount on the Dwelling.It is also used on many liability policys for 3rd party claims.
As I recall the first Homeowners 1959 has Ded 1 and 2 and the amounts could vary. (windstorm was always the highest) but all perils, but only one applied to each coverage.
Now lets get up to 1965 when we had the disappearing deductible. Example you had a Ded. for windstorm of $100.00 you had a loss of $5,000, the loss payment would fall under the brackets for the ded to disappear which was 111% of the loss=$5500.00 gone, amount owed $5,000.Now it would seem to be really fair to only charge premium based on the face amount of the insurance that was collectable(face amount THAT exceeds ACV amount). The large deductible is real co-insurance and co-insurance is not allowed on ISO standard HO or fire insurance.
The public needs to believe in insurance again. We have done this to our proud, honorable proffesion by sending out people with adjusters license to climb roofs. We need help,but the adjuster should be reviewing the loss on paper. but we do need a licensed person with 3 day license to be the helper. All losses are approved by the sbmitted paper work that is sent in by email, but if the people looking at the paper work are not qualified, it all breaks down to "tag team adjusters" If adjusters expain the "first offer" in as great as detail as required (by any means of communication)
), the lawyers and Pa,s would not be able to "rush in". Just look for the TV add,s "Disappearing Deductible Policys".