Home Insurance Deductibles: What You Need to Know

Introduction

Understanding how home insurance deductibles work helps you make informed decisions about your coverage and manage your out-of-pocket costs.

What Is a Deductible?

A deductible is the amount you pay out of pocket before your insurance coverage kicks in for a covered claim.

How Deductibles Work

When you file a claim:

1. You pay your deductible amount
2. Your insurance pays the remaining covered costs up to your policy limits

Types of Deductibles

Percentage Deductibles

Some policies use percentage-based deductibles, typically for wind and hail damage, calculated as a percentage of your dwelling coverage.

Flat Dollar Deductibles

Most policies use flat dollar deductibles, such as $500, $1,000, or $2,500, that apply to most covered losses.

Choosing Your Deductible

Consider:

• Your ability to pay the deductible if you have a claim
• Premium savings from higher deductibles
• Your risk tolerance
• Frequency of claims in your area

Key Takeaways

• Deductibles are what you pay before insurance covers the rest
• Higher deductibles typically lower premiums
• Choose an amount you can comfortably afford
• Review your deductible when renewing

Next Steps

If you're unsure what deductible is right for you, consult with a licensed insurance professional who can help you evaluate your options.