UNDERSTANDING HOMEOWNERS INSURANCE DEDUCTIBLES

Updated: Feb 18



A homeowners insurance deductible is the amount of money that you’re responsible for paying before your insurance company will pay you for an insured loss. The subsequent claim payment that you receive from your insurance company is the total damage or loss amount minus your deductible. That means if your deductible is $1,000 and your home sustains $50,000 in insured damage, your insurance company will pay you $49,000 after you pay your deductible. The amount you pay in homeowners insurance premiums — your monthly or annual insurance payment — is directly correlated with how high or low you set your deductible, so when you set your deductible you’re weighing a couple of things: 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. A high deductible gives you a lower insurance premium, but it could also prove to be too big of a hit to your bank account when it comes time to file a claim.


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What does a homeowners insurance deductible mean?


A deductible is the amount that you pay out of pocket for an insurance claim before your homeowners insurance company will pay out for the remainder of the loss. You pay your deductible on a per-claim basis, meaning if your home is damaged in two different storms that were a month apart, you’d have to pay two separate deductibles. The only exception to this is in the state of Florida, where, if your home is damaged in a hurricane, you pay a hurricane deductible per season rather than for each individual storm. That deductible would then apply to any subsequent hurricane damage until the end of the season, which runs June through November. If a single claim involves two or more property coverage components, you only need to pay one deductible. That means if both your home’s structure, your garage, and your personal property are damaged by a house fire, you may report your home’s structural damage at the outset and personal property loss at a later date, but you’d only need to pay that out-of-pocket deductible once.




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