Flat-Dollar Deductibles
A common home insurance deductible is a fixed dollar amount such as $1,000 or $2,500. If a covered loss exceeds the deductible, the insurer generally subtracts that amount from the covered claim payment, subject to policy terms.
Percentage Deductibles
Some policies use percentage deductibles for certain perils such as wind, hail, named storms, or hurricanes. The percentage is often applied to the dwelling coverage limit, not the amount of the claim. That can make the actual out-of-pocket amount much larger than a flat-dollar deductible.
Why the Lowest Premium Can Be Misleading
A higher deductible may reduce premium, but it also increases the amount you may need to pay after a loss. When comparing quotes, make sure deductible structures are similar before deciding one policy is cheaper.
Questions to Ask
- What deductible applies to most covered property claims?
- Are wind, hail, hurricane, or named-storm deductibles separate?
- If a percentage applies, what dollar amount would that equal today?
- Do different deductibles apply to water, roof, or other specific losses?
- How much premium would I actually save by choosing a higher deductible?
Choose a Deductible You Could Realistically Pay
The best deductible is not automatically the lowest or highest option. It should balance premium savings with an amount you could reasonably handle if a major claim happened unexpectedly.