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Home Insurance Deductibles: Frequently asked questions (FAQs)

Understanding what a home insurance deductible is, when it applies, and how to choose one can be confusing. We'll help you feel confident in choosing a home insurance deductible that's right for you.

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What is a home insurance deductible?

Your home insurance deductible is how much you'll pay out-of-pocket for a covered home insurance claim before your insurance company will pay.

What is a normal home insurance deductible?

Home insurance deductible options will vary among insurance companies. However, most home insurance policy deductibles tend to be from $100 to $5,000.
The average home insurance deductible is $1,000.1

How do I choose a home insurance deductible?

You should choose your deductible based on how much you could comfortably afford to pay out-of-pocket in the event of a claim.

If you are on a budget, you may want to consider a lower home insurance deductible so that you don't have to pay a lot upfront.

Now, if you value saving on your home insurance premium more, going with a higher deductible may make sense. Again, you'll just want to make sure you're able to afford the deductible for an unexpected claim.

Either way, it's always good to get a few quotes with different deductibles to compare rates. Once you feel comfortable, you can pick your home insurance deductible that works for you.

For example, if there isn't much price difference between a $500 and $1,000 home insurance deductible, you may want to pick the lower deductible.

How does a home insurance deductible work?

When you have a covered loss and file a claim, your insurance company will pay the damages minus the amount of your policy's deductible.

For example, let's say you have a covered loss and have

  • A $500 home insurance deductible
  • $6,500 in repairs to your home

Here, you'll pay your $500 deductible first. After that your insurance company will pay the remaining $6,000 in repairs.

What if my home repair costs less than my home policy's deductible?

Remember, you must pay your home insurance deductible first. After that, your insurance company pays on a covered claim. So, if you have a claim and the cost of your repairs is less than your deductible, your insurance won't pay anything.

For example, if you have damage to your home that costs you $300 to fix and your home insurance policy is $500, you'll pay the $300 repair bill. In this case, it usually wouldn't be necessary to file a home insurance claim.

What are the different types of home insurance deductibles?

Most home insurance policies have 2 types of deductibles - standard and percentage. There are also specialty insurance policies that are separate from a home insurance policy. These will have specific disaster deductibles.

  • Standard home insurance deductible: The dollar amount on your policy you picked when you bought your home insurance. This is the $100 to $5,000 deductible that you pay out-of-pocket before your insurance pays on a covered claim. This standard deductible will stay the same-no matter the cost of the damage to your home.
  • Percentage home insurance deductible: Based on a percentage of your home's insured value. These deductibles normally apply to specific claims like wind, hail, or hurricanes. Percentage deductibles differ between companies but are typically between 1% and 10% of a home's listed value in the policy.
  • Disaster home insurance deductible: These are for specialty policies which are separate from home insurance. These can cover things like earthquake and flood.
    • Earthquake insurance deductible: Typically based on the percentage of your home's insured value, but can also be based on where you live. Example: People that live in an earthquake prone area may be subject to a minimum-percentage-based deductible. In this case, this may be a lot more than someone that lives in a less risk-prone area.
    • Flood insurance deductible: There are 2 types-one for damage to your home and one for the things inside it. This is true whether your flood insurance is bought from the National Flood Insurance Program or a private insurer. These home insurance deductibles can be from $1,000 to $10,000.

What types of home insurance coverages don't have a deductible?

Typically, these types of coverages don't have a deductable.

  • Personal Liability Coverage: Coverage that helps protect you if you're responsible for injuries or damages to another person or their property.
  • Medical Payments Coverage: Helps pay for other people's medical expenses if they're injured in your home or on your property.
  • Additional Living Expenses: Helps pay for living expenses if you can't live in your home due to a covered claim. In general, most insurers don't have a deductible for this type of coverage. However, it depends on the individual insurance company.
  • Most insurance policy riders, endorsements or scheduled personal property (ex: jewelry, collections, etc.), don't normally have a deductible unless otherwise stated.

When you get an online homeowners insurance quote with Liberty Mutual, you can change your deductible to see how much it will impact your rate.

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1https://www.thebalancemoney.com/a-guide-to-homeowners-insurance-deductibles-5202500