What is an insurance deductible vs a premium?
How each one shows up on a roof claim
Say hail damages your roof and the insurer's estimate to replace it is $14,000. With a $2,000 deductible, the insurer's payments on that loss total $12,000, often split into two checks if depreciation is held back until the work is done. Your premium plays no part in that math. It was the cost of having coverage in place when the storm hit.
The trade off
- Lower deductible, higher premium: you pay more every year so that a loss costs you less when it happens.
- Higher deductible, lower premium: you save every year but carry more of each loss, which makes small repairs not worth claiming.
Georgia policies often have two deductibles
Many Georgia homeowners policies list an all other perils deductible, a flat dollar figure for fire, theft or a burst pipe, and a separate wind and hail deductible that is often a percentage of the dwelling limit. The second one is what applies to most roof claims, and it can be much larger than the number you remember choosing. A 2 percent wind and hail deductible on a $350,000 dwelling limit is $7,000.
What the deductible is not
It is not a fee you send the insurer. It comes off the settlement, and you pay it to whoever does the repair. It also cannot be waived by a contractor: Georgia makes it illegal for a roofer to absorb, rebate or "cover" your deductible.
Picking the balance
Ask yourself how much cash you could put toward a roof the week after a storm. If the wind and hail deductible would strain you, ask your agent at renewal what a lower percentage or flat deductible would add to the premium, and get both quotes in writing.
More: percentage wind and hail deductibles and why a roofer cannot pay your deductible in Georgia.