A home insurance deductible is the amount you pay upfront, before your insurance begins to cover your loss, when you make an insurance claim because of a fire, theft or other covered damage. You choose your deductibles when you buy your policy.
How does my homeowners insurance deductible work?
Whenever you file a home insurance claim, your deductible is the amount that you pay toward repairing damage to your home or replacing ruined or stolen belongings. You pay your deductible on every claim. You pay it before your insurance coverage starts to pay.
Example: A tree limb falls through your roof. Your claim for repairs is approved at $4,500, and your home insurance deductible is $1,000. You pay your roof repair crew $1,000 — your deductible. Then your insurance company pays the remaining $3,500 cost. If your claim for repairs were $10,000, your share — your deductible — would remain $1,000.
What if your repairs cost less than your deductible? Then there’s no need to file a claim. That’s because the amount of your deductible will pay your whole bill and there will be nothing left for your insurer to cover.
Example: Your dishwasher springs a sudden leak and ruins your hardwood floor. Your deductible is $1,000, but repairs cost $800. Filing a claim would make sense only if repairs cost more than $1,000.
What’s the average home insurance deductible?
The minimum home insurance deductible offered by most insurers is $500 or $1,000, according to the Insurance Information Institute (III). Standard home deductibles can range as high as $5,000.
For certain kinds of coverage, your deductible may be a percentage of your home’s insured value, typically 1% to 5% for wind and hail damage, according to III. If your home is insured for $150,000, a 2% deductible for wind/hail — the amount you pay out of pocket for damage — would be $3,000.
What are the different types of home insurance deductibles?
Standard home insurance deductible
A set amount, typically $500 to $5,000, that you pick when you buy your home insurance policy. A standard deductible is typical for:
Dwelling coverage — insurance for your house itself
Other structures coverage — insurance for sheds, fences, garages that are detached from the house
Personal property coverage — insurance for your belongings
Percentage home insurance deductible
For certain kinds of damage, often wind-, hail- or hurricane-related, your deductible may be a percentage of the insured value of your home instead of a set amount. Typical percentages can range from 1% to 10% and can be higher in earthquake- and tornado-prone areas.
Example: Wind rips off part of your roof. Your house is insured for $200,000, and your home insurance policy has a 2% deductible for wind damage. You would pay the first $4,000 toward repairs — your deductible. If your loss is $5,000, your insurer would pay the remaining $1,000. If your loss is $10,000, your insurer would pay $6,000. The amount you pay would not change even if the amount of your claim does.
Disaster home insurance deductible
Certain natural disasters come with their own deductibles, especially if you live in a high-risk state, according to III. Earthquakes and flooding require separate insurance. Wind, hail and hurricanes are typically covered by a standard policy but can carry special deductibles in some areas. Deductibles vary by type and by state, but these are some general rules of thumb:
Earthquake insurance deductibles — Earthquake insurance typically comes with a percentage deductible that ranges from 2% to 20% of the replacement value of your home, depending on your state. California, for example, sets earthquake deductibles at 15% for your home and 10% for other structures like garages.
Flood insurance deductibles — Flood insurance, whether bought privately or through the National Flood Insurance Program (NFIP), typically comes in two parts with separate deductibles for your home itself and for its contents. These deductibles can be set dollar amounts (ranging from $1,000 to $10,000) or percentages.
Hurricane deductibles: Special higher deductibles — usually percentage deductibles — may kick in depending on the intensity of a storm, and the rules vary by state and insurer, according to III.
How to choose a homeowners deductible
How you choose your home insurance deductible depends in large part on your finances. A higher deductible will cost you more out of pocket if something happens and you file a claim, but if you can afford to pay it, a higher deductible will save you money on your monthly insurance premiums.
High vs. low deductibles
Higher deductibles typically mean lower premiums, and lower deductibles mean higher premiums. Amounts vary by insurer. Market research by Forbes Advisor found that homeowners save an average of 7% on their premiums by increasing their deductible from $500 to $1,000 and 16% by increasing it from $500 to $2,000, but those amounts vary by company and region.
Types of homeowners insurance that don’t have deductibles
Home insurance policies typically contain several types of coverage, and a few of these coverages don’t have a deductible, including:
Personal liability coverage — Helps pay legal and medical expenses if you’re sued for damage or injuries you’re at fault for.
Medical payments coverage — Helps with costs if someone outside your household is injured on your property, no matter whose fault it is.
Loss of use coverage — Also called additional living expenses, this covers added costs if you must live elsewhere because of damage caused by a covered event.
Riders, endorsements and scheduled property, extra coverage for valuable belongings.
How do renters insurance deductibles work?
Renters insurance deductibles work the same way homeowners insurance deductibles work, except they typically only apply to your personal property because the building itself is covered by your landlord’s insurance.
Example: You have a $500 deductible. A leak from the apartment upstairs ruins your furniture and rugs, and your claim for $3,000 for is approved. You’d pay the first $500 toward repairing or replacing your things. Then your insurance would pay $2,500.
Just like homeowners policies, there’s no deductible for liability, medical payments or loss of use claims under renters insurance. Typical renters deductibles range from $250 to $2,000. III says you can save 25% on your premium if you can raise it from $500 to $1,000.
Does my deductible change with the state I live in?
Home insurance deductibles can vary by state, especially when it comes to deductibles for disasters like hurricanes, floods, earthquakes and tornadoes. For example, Florida sets hurricane deductible requirements according to the insured value of your home, and the deductible applies only once a year, not for each hurricane claim. In Oklahoma, Texas and some Midwestern states where tornadoes are common, insurers typically offer a percentage deductible for wind/hail damage instead of the standard deductible. Percentages often are higher in high-risk areas.
Find out more about home insurance in your state
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