How does a deductible work for homeowners insurance?
Types of homeowners deductibles
- Flat dollar deductible: a fixed amount such as $1,000 or $2,500, used for most causes of loss.
- Percentage deductible: a percentage of your dwelling coverage limit, not of the claim. Many Georgia policies apply one to wind and hail.
- Separate peril deductibles: a policy can have one deductible for all perils and a different one for wind and hail or named storms.
The percentage trap
A 1 percent wind and hail deductible sounds small. On a home insured for $300,000, it is $3,000. At 2 percent it is $6,000. Homeowners often discover this only after a hailstorm, when the claim pays far less than expected. Check your declarations page now. See percentage wind and hail deductibles.
Per claim, not per year
Unlike most health plans, a homeowners deductible applies to each separate loss. One storm that damages the roof, siding and fence is one deductible. Two storms a month apart are usually two.
Choosing a deductible
A higher deductible lowers your premium but raises what you pay after each loss. The right choice is the largest amount you could comfortably pay on short notice.
How it interacts with depreciation
The deductible is subtracted on top of any depreciation held back, so the first check on a roof claim can be much smaller than the estimate. See ACV versus RCV.