Insurance policies can come with a lot of industry jargon (yawn). But don’t let your homeowners deductible fall through the cracks when speaking with your Agent. Understanding this can help protect your home and save you money in both the short and long term.
What is a Homeowners Insurance Deductible?
A deductible is the amount of money a homeowner must pay out of pocket before home insurance coverage kicks in. You’ll be able to choose your deductible amount when customizing your policy with your Agent.
The good news is you’ll only pay a deductible if you file a claim. The bad news? It typically resets on a per-claim basis, meaning you’re responsible for paying your deductible every time you file a new claim. As like anything, sometimes there are exceptions to the rule, so it’s important you speak with your Agent to learn more.
Another positive thing to note: some companies offer savings programs. For instance, Swyfft offers a Direct Repair Deductible Savings Program where you could receive 10% OFF your non-wind deductible should you ever need to file a claim.
How does a Home Insurance Deductible Work?
We hope it doesn’t happen, but for the sake of this explanation, let’s say you experienced storm damage that caused $4,000 worth of damage to your home. And you have a $1,500 deductible. You’d file a claim with your insurance company, and if the damage is covered, they’d cut you a check for $2,500.
You, the homeowner, are responsible for coordinating repairs and paying for those services directly. The good news is some insurance carriers have relationships with preferred vendors and contractors who can help coordinate repairs, which makes things a little easier.
What if your home experiences damage that is equal to or below your deductible? Unfortunately, your insurance company won’t pay for any of it. It’s important to keep this in mind when customizing your policy and selecting your deductible amount.
How Do I Choose the Right Homeowners Deductible?
There’s a lot to consider when choosing your deductible. Here’s some things to think about:
- If you have a lower deductible, you’ll pay less out of pocket if you file a claim. On the other hand, you’ll pay more in premium over time.
- If your deductible is higher, you’ll have to pay more should you file a claim, but you’ll have a lower premium.
Before deciding, compare your options and know what you can reasonably afford short term vs. long term.
There’s a lot to know about your homeowners insurance policy, but you’re off to a great start if you’ve made it this far. To determine the right deductible for you, make sure you understand your homeowners insurance policy. And speak with your Agent whenever you’re unsure.