How Does My Homeowners Insurance Deductible Work?  

Your homeowners insurance policy is designed to help with the costs of damage to your home after a covered event, such as a fire, theft, or certain weather-related incidents. It’s essential to understand a crucial element of that coverage—your deductible.

What Is a Deductible?

A deductible is an amount you agree to pay out of pocket before your insurance policy assists in covering a claim. For example, if a covered incident leads to $10,000 in damages to your home and you have a $1,000 deductible, you must pay $1,000 before the insurance provider pays the remaining $9,000.

Types of Homeowners Insurance Deductibles

There are two main types of homeowners insurance deductibles:

• Flat deductible—These are sometimes called standard deductibles, and they are a set amount you pay for each covered claim.

• Percentage deductible—Some homeowners insurance policies will use a percentage of your home’s value to calculate your deductible. For example, a homeowner with a $200,000 home and a 2% deductible would need to pay $4,000 out-of-pocket before insurance pays the rest in a covered incident.

Other Considerations

There are many variables to consider when it comes to insuring your home. Certain claims—such as earthquake, wind, and hail—may require their own policies and have separate deductibles. You may also opt for higher premiums in exchange for a lower deductible, meaning you’ll pay more in monthly or annual premiums but have a lower deductible.

Contact Us

Consult an insurance professional to go over the available options to find the best solution for your needs and budget. Contact Home Loan Insurance today for a quote or more information on homeowners insurance deductibles.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.