What's an insurance deductible?
Who you actually pay
You never mail your deductible to the insurance company. The insurer takes it out of the settlement, and you pay that amount to whoever does the repair. If the approved roof replacement is $12,000 and your deductible is $1,500, the insurer's payments total $10,500 and your roofer collects the other $1,500 from you.
A roof example with depreciation
- Replacement cost of the roof: $12,000
- Depreciation held back for age: $3,000
- Deductible: $1,500
- First check, actual cash value minus deductible: $7,500
- Second check after the roof is installed: $3,000
On a replacement cost policy, your total out of pocket for the covered work is still the $1,500 deductible, as long as you finish the job and submit the final invoice. On an actual cash value policy, the $3,000 is never paid, so your cost would be $4,500.
Words people confuse with it
- Premium: the price of the policy itself.
- Depreciation: value withheld for age and wear, sometimes paid back later.
- Limit: the most the policy will pay.
Rules that come with it
If the damage costs less than your deductible, nothing is paid, and the claim may still appear on your claims history. In Georgia, a contractor cannot waive, rebate or absorb the deductible, so treat it as a real cost and plan for it before storm season.
More: ACV vs RCV on roof claims and how withheld depreciation is paid.