The deductible on your home insurance policy is the amount of money you will be required to pay, out of your own pocket, for any loss covered by your insurance.
Your deductible can be found on the declarations (front) page of your homeowners policy, which also displays your policy dates, coverage limits, and premiums.
With a home, condo, or renters insurance policy the deductible applies to each individual claim for damages to covered structures or personal belongings.
The deductible is a dollar amount that is subtracted from the amount paid by your insurance company for each covered loss.
If you have a $500 deductible and suffer a covered loss with damages totaling $2,500 then your insurance company is going to pay $2,000. You will be responsible for $500 of the repair costs.
Deductible options for home, condo, or renters insurance policies can be as low as $250 or as high as $10,000.
It’s important to keep in mind, when choosing your deductible, there is a tradeoff between the cost of insurance (premium) and how much you will have to pay in the event of a loss.
Raising your deductible will lower your premiums, but doing so assumes you have sufficient funds available to cover that deductible if a loss occurs. When you compare costs for a $500 deductible versus a $1,000 deductible you also need to consider your ability to pay $1,000 if a loss occurs.
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