Deductibles in a Homeowner’s Insurance Claim: Everything You Need to Know

Buying a homeowners insurance policy involves a lot of consideration and thought processes. After you choose a policy of your liking, you’d likely choose a deductible. The deductible is what you’re responsible for paying for your repairs.

Therefore, it is important to choose a deductible that you can afford to pay. That said, policy documents can be complicated paperwork, and it is important to understand the terms and conditions to ensure you receive the settlement you deserve.

Having a public insurance adjuster by your side can make things easier for you because they can help you understand the intricacies of your policy document. Nevertheless, here’s everything you need to know about deductibles in a homeowner’s insurance claim.

Understanding Insurance Deductibles

As mentioned, an insurance deductible is the amount you must pay towards your claimed loss. Don’t confuse it with your insurance premiums which is the cost of getting the insurance policy in the first place.

Another thing to remember is that the higher your deductible is, the lower your insurance premium will be. On the other hand, the lower your deductible, the higher your insurance premium will be. If you’re wondering how these deductibles work, the following example will make things clearer:

Let’s say your home suffered damage due to a fire that cost $15,000 in repairs. If the incident comes under the domain of your policy, your insurer will likely cover the repair cost. If your homeowner’s insurance deductible is $2,000, your insurer will cover $13,000 while you’d pay the remaining from your pocket.

Types of Deductibles

There are two types of main homeowner’s insurance deductibles. They are described in greater detail below:

· Dollar-amount deductible: This is a specific amount you’re expected to pay from your pocket when filing a claim with your insurer. In the example mentioned above, the deductible was a dollar amount of $2,000.

· Percentage-based deductible: A percentage-based deductible is usually calculated as a percentage of your home’s insured value. For example, if your policy is a 1% deductible and your coverage is $200,000, then your deductible will be 1% of $200,000 which is $2,000.

There’s also a chance that you may have several deductibles in a single policy. For example, you may have dollar-based deductibles for specific claims and percentage ones for others. Make sure to read your home insurance policy to understand the type of deductibles applied when you file an insurance claim.

Choosing a Deductible

Choosing a homeowner’s insurance deductible is essential when selecting appropriate coverage. You should have a pretty clear idea of the type of deductible and the insurance premium you can afford to pay out of pocket. Consider your budget and whether you have the necessary cash savings to cover deductibles in an unforeseen event.

Some homeowners are also willing to take a bigger risk to pay a lower annual premium, hoping they wouldn’t need to file a claim. This means that they will pay lower annually but, at the same time, will be paying a higher deductible if they file a claim.  

You must strike a balance between paying insurance premiums and deductibles. Get different insurance quotes based on different deductibles to find the amount that looks reasonable and is well within your budget.

Another important thing to note is that standard homeowners’ insurance covers wind and hail damage from storms and hurricanes. Most property owners buy flood and earthquake policies separately, and every natural disaster has its own deductible rules.

Therefore, it is important to understand your unique circumstances and the type of insurance you require. The type of policy you get also depends on your home, location, size, and risk of natural disasters. Make sure to shop around for insurers and choose the one that provides adequate coverage, has a flexible deductible policy, and provides a seamless claims process in the event of any damages.

Hiring a Public Insurance Adjuster in Texas

As mentioned earlier, it is important to have a public insurance adjuster by your side when understanding your policy and deductibles and filing claims with your insurer. However, finding one can be easier said than done. If you’re looking for one, you’ve come to the right place.

Morgan Elite Specialist Services are licensed public insurance adjusters in Texas with extensive experience in all aspects of insurance claims. The company has extensive experience in dealing with high-profile claims, and its proactive approach to handling complex issues ensures that its clients receive quick and fair settlements.

Morgan Elite Specialist Services provides impeccable services, which include public adjusting, insurance appraisals, diminished value calculations, estimates, risk and building consulting, forensic accounting, and expert witness. You can visit their website for more information or contact them today for more details.