When does a homeowners insurance deductible get paid, and to whom?
Short answer. You do not pay the deductible to your insurance company. The insurer subtracts it from the claim payment, and you pay that amount to your contractor as part of the job, usually on the schedule in your contract. Until the work is done, the deductible is simply the gap between the insurer's checks and the contract price.
How the money flows on a typical roof claim
- The insurer approves the claim and sends the first check: actual cash value minus your deductible.
- You sign a contract with the roofer for the full replacement cost of the approved scope.
- You pay the roofer according to the contract, which typically means the first insurance check plus your deductible, either as a deposit or at completion.
- After the work is finished, the insurer releases the held back depreciation, and that goes to the roofer as the final payment.
See ACV vs RCV for why there are two checks.
If your mortgage company is on the check
Your lender may need to endorse the check, and some hold larger amounts in escrow and release it in stages. Your deductible is still yours to pay to the contractor. See mortgage company insurance checks.
Red flags
- A roofer who says you will never have to pay the deductible. That is illegal in Georgia. See roofers and deductibles.
- A request for the entire job price in cash up front before materials are delivered.
- An invoice that does not show the deductible as part of the price.
If you cannot pay it all at once
Ask about financing or a payment plan before you sign. Do not let anyone "absorb" it.