Homeowner Insurance Deductibles

Insurance deductibles can be confusing, and part of the purchase process buyers must understand so they can stay in budget. 

A deductible is simply the amount of money you pay before the insurance company pays on a covered loss.  If you have a $10,000 loss and a $1,000 deductible, the insurance company will only pay $9,000.  You are responsible for the difference.

Lenders may limit the amount that buyers can have for a deductible, so it is important to understand what is required prior to closing.

Some insurance companies offer split deductibles.  The deductible for wind and hail may be higher than the deductible for all other losses.

Other companies may have a percentage deductible.  The deductible is based on the insurable value of the home.  A cheaper premium may not be worth it if you cannot afford the deductible if you have a loss.

It is important that the client find their insurance product prior to closing so there are no surprises!