Finance & Insurance

How a Deductible Works for Home Insurance?

If you own a home insurance, you must be familiar with the term “Deductible”. It sounds strange. Isn’t it? Well, it is the technical term that represent the amount that the homeowner has to pay before the insurance coverage. The home insurance won’t cover the deductible as the owner needs to pay it from own pocket. 

It doesn’t work as a bill or an installment, instead, the insurance company deducts it from the total amount of insurance as you need to pay it beforehand, to repair the damage for which you are claiming the insurance amount.

To exemplify, if your deductible is $1,000 and you are claiming insurance of $10,000 for the house, you have to pay the deductible from your pocket to the repairing company or person and you will receive $9,000 for the claim.

How Does Deductible work for Home Insurance?

As from the aforestated definition, you can conclude that deductible is paid by the homeowners and not by the insurance company, whenever insurance is claimed. 

The deductible amount is needed to be paid on every claim, irrespective of the gap of time between two claims. If there is damage due to two different storms or earthquakes within the same month, separate deductibles will be required to be paid by the homeowner, and the rest of the claim will be paid by the insurance agency. Nevertheless, the state of Florida has slightly different rules as you need to pay the hurricane deductible per season and not for a single storm. One hurricane season is counted from June to November. Important to mention, if there is a claim that covers two properties, only one seasonal deductible is required. 

For example, if your insurance covers your home, garage, or other personal property, one deductible will work for all. And, if damage occurs to your house, garage, and personal property, only one deductible is enough for the overall claim. To get any help or solution related to your home insurance deductibles, you can visit:

What are the Two Types of Home Insurance Deductibles?

Deductibles can be categorized into two different types that are usually mentioned on the declarations page of your insurance policy. One out of two is, the standard dollar amount for almost all types of dangers and the other one is a definite percentage of your home insurance value that mostly covers wind/hail or hurricane-related claims. 

Irrespective of the deductible type, the homeowner first needs to pay the deductible, and only then the remainder of the claim will be paid by the insurance company. 

Let’s dive deep into the functioning of both, as both of them have different purposes: 

1. Standard Dollar Deductible:

The standard dollar amount is fixed and the homeowner pays it for own pocket for every claim. The deductible depends upon the insurance plan you choose. The amount can lie between the ranges starting from $500 to $2,000. However, higher or lower deductible plans are also common. This type of deductible is usually lower than the percentage deductibles. 

For example, if the standard deductible amount is $1,000 and you claim $7,500 for repairing the damage on the sideline of the house, you need to pay your share first and the remaining amount will be sent to you by cheque.

2. Percentage Deductibles

Percentage-based deductibles depend upon the windstorm, named storm, and hurricane-based claims. It is determined by some percentage of the value of your home insurance or total coverage amount. 

To exemplify, if your house has an insurance value of $500,000, the deductibles’ percentage is 1%, the $5,000 would be automatically deducted from the claim payment and reimbursement would be sent after you pay the deductibles. 


To conclude, we can say that having a higher deductibles will automatically affect the premium payments and depose more loads on the shoulders of the homeowner.

So, we would like to advise that people with higher home values should avoid going for percentage-based deductible as the dollar amount option will suit them the best.

Also Read: Types of Life Insurance

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