Understanding your insurance deductibles

September 15, 2025 Homeowner

Insurance deductibles play a key role in how much you pay out-of-pocket when filing a claim. Whether you're insuring your home or property, understanding the different types of deductibles can help you avoid surprises and choose the right coverage for your needs.

What is an insurance deductible?

A deductible is the amount you agree to pay before your insurance coverage kicks in. For example, if you file a claim for $10,000 and your deductible is $2,000, your insurance provider will pay $8,000.

Types of home insurance deductibles

Overall (standard or all-perils) deductible

This is the most common deductible and applies to most causes of loss—like fire, theft, or vandalism—unless a separate, specific deductible is listed for a certain peril (like wind or hail).

Flat amount or percentage-based
Example: $1,000 deductible or 1% of your home's insured value
Applies to: general losses not otherwise specified

Wind and hail deductible

Due to the frequency and severity of wind and hail damage—especially in storm-prone regions—many insurance companies apply a separate, often higher deductible for these perils.

Usually percentage-based (1%–5% of your home’s insured value)
Applies to: windstorms, tornadoes, hail events
Often required in coastal or tornado-prone areas

Named storm or hurricane deductible

This deductible applies when damage is caused by a named tropical storm or hurricane declared by the National Weather Service.

Typically 1%–5% of the dwelling coverage amount
Primarily used in coastal states

Key tips

Review your policy to understand which deductibles apply to which perils
Higher deductibles often mean lower premiums, but more out-of-pocket when you file a claim
In high-risk areas, insurers may require certain deductibles (like hurricane or wind)

Deductible Types: Flat vs. Percentage-Based

Deductible type	Description	Example
Flat deductible	a fixed dollar amount	$1,000 per claim
Percentage deductible	a percentage of your home’s insured value	2% on a $300,000 home = $6,000

Deductibles can greatly affect your claim payout and financial responsibility after a loss. Always discuss options with your insurance agent to ensure your coverage and deductibles fit your needs and risk tolerance.

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