What is an insurance deductible?

Your deductible is the amount you pay before your insurance coverage takes over. For example, if you choose a policy with a $1,000 deductible and you experience a loss, you will be responsible for the first $1,000 on any claim. Adding a higher deductible to your policy may be an effective way for you to lower your insurance premium. However, if you take this approach, you'll want to be sure you can cover the amount of the deductible in the event you file a claim (at the time of the event).

How does an insurance deductible work?

Get a deeper understanding of how insurance deductibles work with the below examples:

Hurricane Deductible

If you live in a hurricane-prone area, your homeowners insurance policy may also include a hurricane deductible. If your homeowners insurance policy includes a hurricane deductible, you will pay that amount toward repairs if a hurricane occurs and damages your home. The deductible amounts vary by state, and sometimes it can even be a percentage of your dwelling coverage instead of a set dollar amount. We can help you to understand the hurricane deductible options in your state.

Note: Generally, hurricane deductibles only apply if the National Weather Service issues a "hurricane watch or warning," and the hurricane strikes your home at the level of severity outlined in your insurance policy.

Wind or Hail Deductible

Your home insurance or condo insurance policy may also include a deductible for damage caused by two other forces of nature: wind and hail. If this deductible is included in your policy, you'll pay this deductible only if your home is damaged by wind or hail.