Home Insurance Deductibles: FAQs | Liberty Mutual (2024)

What is a home insurance deductible?

Your home insurance deductible is how much you'll pay out-of-pocket for a covered home insurance claim before your insurance company will pay.

What is a normal home insurance deductible?

Home insurance deductible options will vary among insurance companies. However, most home insurance policy deductibles tend to be from $100 to $5,000.
The average home insurance deductible is $1,000.¹

How do I choose a home insurance deductible?

You should choose your deductible based on how much you could comfortably afford to pay out-of-pocket in the event of a claim.

How does a home insurance deductible work?

When you have a covered loss and file a claim, your insurance company will pay the damages minus the amount of your policy's deductible.

For example, let's say you have a covered loss and have

A $500 home insurance deductible
$6,500 in repairs to your home

Here, you'll pay your $500 deductible first. After that your insurance company will pay the remaining $6,000 in repairs.

What if my home repair costs less than my home policy's deductible?

Remember, you must pay your home insurance deductible first. After that, your insurance company pays on a covered claim. So, if you have a claim and the cost of your repairs is less than your deductible, your insurance won't pay anything.

For example, if you have damage to your home that costs you $300 to fix and your home insurance policy is $500, you'll pay the $300 repair bill. In this case, it usually wouldn't be necessary to file a home insurance claim.

What are the different types of home insurance deductibles?

Most home insurance policies have 2 types of deductibles - standard and percentage. There are also specialty insurance policies that are separate from a home insurance policy. These will have specific disaster deductibles.

Standard home insurance deductible: The dollar amount on your policy you picked when you bought your home insurance. This is the $100 to $5,000 deductible that you pay out-of-pocket before your insurance pays on a covered claim. This standard deductible will stay the same-no matter the cost of the damage to your home.
Percentage home insurance deductible: Based on a percentage of your home's insured value. These deductibles normally apply to specific claims like wind, hail, or hurricanes. Percentage deductibles differ between companies but are typically between 1% and 10% of a home's listed value in the policy.
Disaster home insurance deductible: These are for specialty policies which are separate from home insurance. These can cover things like earthquake and flood.
- Earthquake insurance deductible: Typically based on the percentage of your home's insured value, but can also be based on where you live. Example: People that live in an earthquake prone area may be subject to a minimum-percentage-based deductible. In this case, this may be a lot more than someone that lives in a less risk-prone area.
- Flood insurance deductible: There are 2 types-one for damage to your home and one for the things inside it. This is true whether your flood insurance is bought from the National Flood Insurance Program or a private insurer. These home insurance deductibles can be from $1,000 to $10,000.

What types of home insurance coverages don't have a deductible?

Typically, these types of coverages don't have a deductable.

Personal Liability Coverage: Coverage that helps protect you if you're responsible for injuries or damages to another person or their property.
Medical Payments Coverage: Helps pay for other people's medical expenses if they're injured in your home or on your property.
Additional Living Expenses: Helps pay for living expenses if you can't live in your home due to a covered claim. In general, most insurers don't have a deductible for this type of coverage. However, it depends on the individual insurance company.
Most insurance policy riders, endorsem*nts or scheduled personal property (ex: jewelry, collections, etc.), don't normally have a deductible unless otherwise stated.

When you get an online homeowners insurance quote with Liberty Mutual, you can change your deductible to see how much it will impact your rate.

Start my homeowners insurance quote

FAQs

What deductible should I choose for home insurance? ›

You should choose your deductible based on how much you could comfortably afford to pay out-of-pocket in the event of a claim. If you are on a budget, you may want to consider a lower home insurance deductible so that you don't have to pay a lot upfront.

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What is the 80% rule in homeowners insurance? ›

When it comes to insuring your home, the 80% rule is an important guideline to keep in mind. This rule suggests you should insure your home for at least 80% of its total replacement cost to avoid penalties for being underinsured.

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How does deductible work on home insurance claims? ›

You can choose to have a percentage deductible, which means your deductible would be a percentage of the total coverage amount on your policy. For example, if your home is insured for $300,000 and your deductible is 2 percent, you'd pay $6,000 of the claim ($300,000 multiplied by 2 percent).

What is an insurance deductible group of answer choices? ›

The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. A fixed amount ($20, for example) you pay for a covered health care service after you've paid your deductible.

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What is the best deductible amount? ›

Your deductible should be an amount you can comfortably cover in case you need to file a claim. Car insurance deductibles usually range from $100 to $2,000, with a $500 deductible being the most common.

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Is it better to have a higher or lower deductible? ›

Key takeaways. Low deductibles are best when an illness or injury requires extensive medical care. High-deductible plans offer more manageable premiums and access to HSAs. HSAs offer a trio of tax benefits and can be a source of retirement income.

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What is an insurance deductible foolproof? ›

A health insurance deductible is the amount you must pay annually before your insurance company starts to pay for the costs of medical services and sometimes prescriptions. For example, if your plan had a $3,000 deductible, you'd have to pay the first $3,000 for healthcare before your insurer would begin to pay.

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What if damage is less than deductible? ›

What if my car repair costs less than my deductible? There may be times when your car insurance deductible is more than the cost of the damage to your vehicle. Unfortunately, in these cases, you'll need to pay for all repairs out-of-pocket. This is because insurance only pays for damages that are above your deductible.

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Can home insurance deductibles be claimed on taxes? ›

You can claim deductions for health insurance if it's paid for with after-tax dollars and renters insurance if it qualifies as a business expense. With homeowners insurance, the amount you pay in premiums and deductibles can be deducted from your taxes if you rent out your home or work from home.

Is a $2500 deductible good home insurance? ›

Is $2,500 a good home insurance deductible? As long as you're comfortably able to pay it in the event of a claim and don't mind footing the bill for smaller losses (say, a broken pipe or stolen laptop), $2,500 is a fine deductible to choose.

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When deciding on a deductible amount, remember that? ›

Keep in mind that insurance deductibles are based on financial risk. If you opt for a higher deductible, you'll be paying a lower rate, but you're also assuming greater financial responsibility for the expenses you'll be required to pay for a claim.

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What is generally true about deductibles in insurance policies? ›

Policies with lower deductibles typically have higher premiums, meaning you'll pay more each month for your insurance coverage. However, if you have a higher deductible, you may be able to save money on your premiums but may be responsible for paying more out of pocket if you need to file a claim.

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Is 1500 a good deductible for home insurance? ›

What Is the Average Deductible Cost for Homeowners Insurance? The average cost of a $500 deductible for a $350,000 home insurance policy is $1,710. By increasing that deductible to $1,000, you can save $115 annually on average. Raising it to $1,500 or $2,000 may lower your premium even more.

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What is a good wind and hail deductible? ›

Costs of wind/hail deductibles are usually calculated in one of two ways, Bonelli says. Homeowners may pay a flat amount such as $1,000 or $2,000 per claim. Or, more commonly, homeowners may pay a percentage of their home insurance coverage, typically between 1 and 5 percent, according to the III.

Will a lower deductible will reduce the premium for homeowners insurance? ›

A home insurance deductible is what you pay before your insurance provider steps in to help pay for damages to your home and personal belongings from a covered loss, such as a windstorm or fire. Typically, the higher your deductible, the lower your premium.

Do you choose your deductible? ›

You typically have a choice between a low and high deductible. A low deductible means a higher insurance rate, whereas a high deductible means a lower insurance rate.

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