What is a homeowners insurance deductible?

How does a home insurance deductible work?

Homeowners insurance claims for damaged property and stolen items typically have a deductible. Your insurance company only pays for covered losses above your policy's stated deductible.

A homeowners insurance policy usually includes a deductible applicable to the following coverages:

• Dwelling coverage: pays for damage to your home's structure due to a covered peril
• Other structures coverage: pays for damage to structures not connected to your home, such as a detached garage or shed, due to a covered peril
• Personal property coverage pays for damage to your personal belongings, such as furniture and electronics, due to a covered peril

These homeowners insurance coverages typically don't have an applicable deductible:

• Personal liability coverage
• Medical payments to others coverage
• Loss of use coverage

If you schedule a valuable item such as an engagement ring to your homeowners insurance policy (also known as adding a rider), there typically won't be a deductible.

How much are homeowners insurance deductibles?

Homeowners deductibles can range between $500 and $5,000 or more, depending on your policy. Your deductible may be a fixed dollar amount or a percentage of your home's insured value.

What is a percentage deductible?

Percentage deductibles are based on a percentage of your home's insured value rather than a fixed amount. Percentage deductibles are prevalent in policies for homes that may be susceptible to damage from severe weather and can be much higher than a lower, fixed deductible option. Your insurer often decides when a percentage deductible applies; you won't have the option to choose otherwise.

What is a wind/hail deductible?

Depending on your state and the insurance company, you might have a separate deductible for damage caused by certain perils such as hail, hurricanes, or windstorms. Wind/hail deductibles and hurricane deductibles are often either flat amounts, such as $500 or $1,000, or a percentage of the dwelling coverage limit on a homeowners policy.

How to choose the right deductible for homeowners insurance

If you have the option to choose your homeowners deductible amount, the decision comes down to what you can comfortably afford in both the short and long term. If you want lower out-of-pocket expenses for unexpected covered losses, choose a lower deductible. If you prefer a lower homeowners insurance premium, choose a higher deductible, and expect to pay more out of pocket if you file a claim. Generally, your deductible shouldn't be higher than what you can afford to pay out of pocket in case of a claim.

When do you pay the deductible for homeowners insurance?

Your insurance company typically subtracts your homeowners insurance deductible from the total amount of your claim. You're responsible for the unpaid expenses related to the claim. Learn about filing a homeowners insurance claim.

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