Home Insurance Deductibles
- A deductible is the amount you pay out-of-pocket before your insurer covers a claim.
- Higher deductibles often lower premiums, but make sure you can afford the out-of-pocket cost.
- Often, wind and hail damage have a separate deductible that is percentage-based
How to choose the right deductible for homeowners insurance
If you’ve had car or renters insurance, you’ve probably dealt with deductibles before. They work the same way in home insurance, though there are a few key differences to know.
Your home is one of your biggest investments, so choosing the right deductible helps ensure you can recover financially if you experience a loss. In this guide, we’ll explain how home insurance deductibles work, what they apply to, and how to pick the right amount for your needs.
What is a home insurance deductible?
A deductible is your out-of-pocket expense before your homeowners insurance covers the rest of the financial cost of your claim. For instance, if your home sustains $25,000 in damage and you have a $1,000 deductible, you can expect your insurance company to pay out $24,000 for the claim. Ultimately, it is your portion of financial responsibility before your insurer will cover the remainder for the covered loss.
How to Read a Homeowners Insurance Policy | The Zebra
Master the essentials of your homeowners insurance policy, learn how to interpret the declaration page, identify coverage limits & recognize exclusions.
Which home insurance coverages require a deductible?
The cornerstone of a homeowners insurance policy is coverage for your dwelling, which is the structure of your home (including attached structures, like a garage). It also includes coverage for other (detached) structures, personal property, additional living expenses, personal liability and medical payments. Learn more about what home insurance covers.
Your deductible is only required for the property-specific coverages: your dwelling, other structures and personal property. It is not required for additional living expenses (also known as loss of use), personal liability and medical payments.
If you’ve fortified your home insurance policy with additional endorsements or riders, a deductible may be required if you file a claim to get coverage through one of these endorsements. However, these deductibles tend to be much less, depending on the company you insure your home with, and are separate from your primary deductible.
Save more, stress less on insurance
Types of deductibles in home insurance
Unlike auto insurance, in which your deductible is always a fixed amount, there are two types of deductibles offered by homeowners insurance:
This is the fixed dollar amount you pay before your insurance company covers the rest of your claim. The most common amounts range from $500 to $2,000, but higher and lower amounts can be found as well.
This type of deductible is calculated as a percentage of your dwelling coverage amount, i.e. your home’s insured value. It usually ranges from 1-10%. So if your home is insured for a replacement cost of $150,000 and you have a 1% deductible, $1,500 would be deducted from your claim payout as your portion of financial responsibility.
Natural disasters in which homeowners insurance does not cover are subject to separate deductibles. These tend to be very state-specific, as not all states mandate coverages like hurricane deductibles. Depending on your location, insurer, and coverage type, you may have the option of opting for the traditional fixed deductible rather than a percentage.
| Type of Disaster Coverage | Deductible Type |
|---|---|
| Hurricane and windstorm | Percentage; may have the option of a fixed amount for a higher premium |
| Flood | Both; varies by state and insurance company |
| Earthquake | Percentage |
Does Home Insurance Cover Natural Disasters? | The Zebra
Your home insurance coverage after a natural disaster depends on your location. Most natural disasters, hurricanes, floods, and earthquakes are not covered by homeowners insurance.
How deductibles impact homeowners insurance rates
Your homeowners insurance premium and your deductible have an inverse relationship. Just like with auto insurance, a higher deductible will lower your premium, and a lower deductible will increase your premium.
This is because a high deductible means you’ll be bearing more of the financial burden in the event you need to file a claim, thereby reducing some of the costs your insurance company would otherwise be responsible for. Below is an illustration of the nature of this relationship.
Rates also vary from company to company, and some insurers will also impose a percentage-based deductible rather than a fixed-dollar rate. It's important to remember that the cheapest coverage isn't always the best.
The table below shows rates from top companies and how they vary by deductible: $500, $1,000, $1,500, and $2,000.
Source: The Zebra
Why wind and hail deductibles are different
A wind and hail deductible is what you pay out of pocket, specifically for storm damage, before your home insurance helps cover repairs. Unlike your regular deductible, which is usually a flat dollar amount, this one is often a percentage of your home’s insured value (for example, 2% of a $300,000 home equals $6,000). Insurers separate it because wind and hail claims are more frequent and expensive, so this helps keep overall premiums more affordable for everyone.
We asked our in-house agents about this, and if people are often surprised to learn they can have different deductibles for the same home policy. Here's what our expert had to say:
“Absolutely. I don’t think it’s very well understood. With auto insurance, most people expect a flat $1,000 deductible, no matter the situation. But with wind and hail, it's a whole different ballgame. Carriers usually list deductibles as a percentage instead of a dollar amount, and that can be confusing. It’s an easy way to nudge people into choosing a higher deductible without fully realizing what they’re committing to. Definitely something to look out for.”
-Erick Sosa, Manager and Licensed Agent at The Zebra
How to choose a homeowners insurance deductible
When choosing your deductible, the key question is: what can you afford now versus later? Striking a balance between your deductible (the upfront cost if you file a claim) and your premium (your ongoing cost) is the best way to find the right fit for your budget.
Before you shop for coverage, ask yourself:
- Can I afford a higher deductible if it means paying less each month?
- Or would I rather pay a higher premium to reduce my out-of-pocket costs after a loss?
- Does my area face risks like hurricanes or wildfires that could require special deductibles?
Every insurer weighs these factors differently, so it’s smart to compare quotes before deciding. The Zebra makes it easy, just enter your ZIP code below to see home insurance rates instantly.
Get great rates with zero hassle.
Home insurance deductibles FAQs:
About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.