Review The Deductibles In Your Homeowner’s Policy

Homeowner’s insurance is necessary so you can have peace of mind that unexpected events won’t be financially devastating, and your home can be repaired as soon as possible. In fact, most banks require homeowner’s insurance to secure a loan. However, it’s essential to review your policy before purchasing, so you’re entirely aware of what deductibles you’ll be responsible for paying. Let’s take a closer look.


What’s a deductible?

A deductible in a homeowner’s insurance policy is the amount of money that you will be responsible for paying out of pocket while your insurance pays the balance of the covered loss. For example, if you sustain $1200 worth of covered damage but have a $500 deductible, the insurer will pay only $700 and you will have to pay the balance to make your repairs.


Should you go for a high or low deductible?

There are several factors you should consider when deciding on the right policy with the right deductible. You should think about how much you can afford to pay in insurance payments versus how much you can afford to pay out of pocket if something bad happens to your home. A higher deductible gives you a lower insurance premium to pay, but it means you’ll have to pay more out of pocket when you file a claim.


What are the two types of deductibles for homeowner’s insurance?

Homeowner’s policies have two different deductibles. They are:

  • Fixed deductible- this deductible is the fixed amount that you pay out of pocket when you file a claim for a covered loss.
  • Percentage Deductible- these deductibles are specific to storm-related claims. They are calculated based on the percentage of your home’s value. So, if you own a $200,000 home and you have a 1% hurricane/wind/hail deductible, $2000 would be your deductible for that claim.


Some policies have two deductibles, a percentage deductible for hurricane/wind/hail damage and a fixed deductible for all other types of claims.