When you buy homeowners insurance from a local insurance firm, you will have to choose a deductible for various coverages provided by your policy.

A deductible is the amount of money that you must pay as your portion of any recovery from a covered loss when a claim is made under homeowners insurance services.

Because deductibles affect your yearly premium and are based on the amount of deductible you choose, it’s important to understand how homeowners policy deductibles work so you choose the right one.

What Are the Different Types of Deductibles?

Homeowners insurance policies have two different types of deductibles: flat rate or percentage as provided by the policy language

  • Flat - A flat deductible is when you choose a certain dollar amount to be paid as a deductible any time a claim is made under that coverage with your homeowners insurance firm.
  • Percentage - A percentage deductible is one often assigned by that insurance company based on a percentage of the insured value of your home which usually translates into the amount of coverage that you carry.

Where it used to be that everyone carried a flat rate deductible based on how much they could afford, it is now more common to have percentage deductibles on homeowners insurance.

Is There A Standard Deductible for Homeowners?

There is no “standard deductible” with home insurance as there is with health insurance, for example.

Most health insurance deductibles have a yearly amount that you must first meet before claims are paid.

With home owners policies, deductibles are applied to each claim that is made and there is no yearly amount to meet so that any subsequent claims are totally covered.

Deductibles and Insurance Premiums

The deductible amount that applies to the policy that you purchase from a homeowners insurance service will affect your premium in a very basic way.

If you have chosen either a high flat deductible or percentage deductible to pay when you submit a claim to your insurance firm, your premium will usually be lower as it reflects your willingness to assume more of your insurance risk.

Conversely, choosing a lower flat rate deductible will increase your premium payments because most of the risk is assumed by the insurance company.

Choosing the Appropriate Deductible

In choosing the appropriate deductible for your homeowners insurance policy, you must balance premium affordability with the deductible amount to choose an amount that is more suitable for your budget.

Ideally, a higher deductible and lower premium could save you more money if you have infrequent claims; however, if you experience more losses for higher valued articles, a higher premium with a lower deductible could be better.

Be sure to discuss policy deductibles with your insurance agent to determine which option would be a wise choice based on your house, past claims record, and other details.

De-Mystifying Homeowners Insurance Deductibles

Regardless of the size of your house or its value, you need homeowners insurance to protect it.

Like any other insurance policy, there is a deductible to cover your portion of a covered loss.

Talk with your homeowners insurance service about these different deductibles to see which one should be right choice both for coverage and cost.

An experienced insurance firm can help you get the highest amount of coverage at the lowest overall rate to save you money!

Need Homeowners Insurance in College Station TX?

See Jones & Associates For Homeowners Insurance Services!

Call (979) 599-7532!