Understand your home insurance deductible.

Your homeowner’s insurance deductible is the amount of money you, the insured, are responsible for paying toward each claim loss.  In most cases it is not expected for the insured to come out of pocket for the deductible; it will be deducted from the amount the carrier estimates for the total claim loss.  It is a way the risk is shared between the carrier and the insured.  Deductibles are applied to each claim event.

Homeowner deductibles are either a percentage of the insured property amount or a fixed amount, depending on the cause of loss.  Usually a hurricane deductible is a percentage of the dwelling limit of insurance.  In the case of a 2% hurricane deductible of a home valued at $200,000 the deductible would be $4,000.  For the same home, under any other peril, like a sudden water loss, the deductible would usually be a fixed amount, either $1,000 or $2,500.  Here in the state of Florida, the majority of homeowner’s have both types of deductibles on their homeowner’s policy: a hurricane deductible as a percentage of the value of their home, and a set dollar amount for all other perils insured against.  Be sure to understand each of the two deductible amounts as they vary greatly.

Homeowner deductibles generally apply to damage to the dwelling, not liability.  In cases of liability claims, deductibles are not usually expected to be paid by the insured.

The value of the homeowner deductible can greatly affect the premium.  The higher the deductible (the greater the insured is willing to subtract from the claim value in their shared responsibility) the lower the premium.  Be sure you’re aware and comfortable with the deductible amount; in the event of a loss you will be responsible for that amount.

Renter policy deductibles are usually a set dollar amount, either $500 or $1,000.  Because renter’s policies are for personal property only, no coverage for dwellings, they have only one deductible and it’s usually a fixed dollar amount.

Flood policy deductibles can vary by percentage of dwelling or fixed dollar amount, be sure to read your policy or ask questions.

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