What Are the Different Types of Home Insurance Deductibles?

When shopping for a home insurance plan, understanding the different types of deductibles is an important part of the decision-making process. Deductibles are the amount of money you must pay before your insurance company will begin to cover the cost of a claim. Deductibles vary by type, so it’s important to understand the different types of deductibles that may be included in your home insurance plan.

Fixed Deductible

The most common type of deductible is a fixed deductible. This type of deductible is a fixed dollar amount that you must pay out-of-pocket before your insurance company will cover the cost of a claim. For example, if you have a fixed deductible of $500 and the cost of a claim is $2,000, you must pay the first $500 before your insurance company will cover the remaining $1,500.

Percentage Deductible

A percentage deductible is a type of deductible that is based on the value of your home. For example, if you have a percentage deductible of 2%, and your home is valued at $200,000, your deductible would be $4,000. In this case, you would need to pay the first $4,000 before your insurance company would cover the remaining cost of the claim.

Waiver of Deductible

Another type of deductible is a waiver of deductible. This type of deductible is available with some home warranty companies and is designed to waive the deductible if a certain type of claim is made. For example, if you have a waiver of deductible for hail damage, and you make a claim for hail damage, you may not have to pay the deductible.

Choosing the Right Deductible

When choosing the right deductible for your home insurance plans, it’s important to consider your budget and the types of claims you may be making. If you have a tight budget and are likely to make small claims, a lower deductible may be a better choice. On the other hand, if you have a larger budget and are likely to make more expensive claims, a higher deductible may be a better choice. It’s also important to consider the types of claims you may be making and whether or not a waiver of deductible is available.

Conclusion

Understanding the different types of deductibles that may be included in your home insurance plan is an important part of the decision-making process. Fixed deductibles are the most common type of deductible, but percentage deductibles and waivers of deductible are also available. When choosing the right deductible for your home insurance plan, it’s important to consider your budget, the types of claims you may be making, and whether or not a waiver of deductible is available. If you’re looking for help finding the right home insurance plan, it’s a good idea to read Pulse Power reviews of Reliant Energy, and compare Dallas energy plans.