How your deductible works

Unlike health insurance, there's no such thing as meeting your annual renters or homeowners deductible. Instead your deductible applies for most claims, no matter how many you have per year. Also, your insurance company only pays for damages above your deductible. That means if you have $500 in damage and a $1,000 deductible, you're paying for everything out of pocket.

The higher your deductible, the more of the repair or claim cost you'll have to take on. That means your out-of-pocket costs will be higher, but you'll have a lower overall rate and vice versa.

If your home is completely destroyed (called a total loss), your insurer will give you a payment for the full amount of dwelling coverage on your policy, minus your deductible.

Most coverages have a deductible, except for personal liability, which covers you if someone sues you for injuries or damage to their property. If you add something valuable to your policy (also called “scheduling” an item), such as an engagement ring, you won't have a deductible.

Get an insurance quote online, and we'll show you exactly how your deductible changes your price.

How to choose the right deductible

Deductibles for a home or renters insurance policy typically range anywhere from $500 – $5,000, and some companies may allow you to choose a percentage of your total coverage amount.

  1. Do you want to pay less for insurance or repairs?

    If you want to pay less for repairs, go with a lower deductible (and vice versa).

  2. How much can you afford to pay out of pocket?

    Your deductible should never be higher than that amount because if something happens, that's how much you'll likely have to pay.

    Depending on your state, you may be able to choose a specific homeowners deductible for wind/hail damage, earthquakes, etc.