Deductible

A deductible is the out-of-pocket amount you agree to pay before your insurance carrier pays for a covered claim. In a shifting economy, many homeowners choose higher deductibles ($2,500 or $5,000) to lower their annual premiums. However, you must be careful with ‘Percentage Deductibles’ for wind or hail, which are common in coastal policies. These are calculated based on your home’s total value, meaning a 2% deductible on a $500,000 home results in a $10,000 out-of-pocket cost.