What is the deductible in a renters or homeowners insurance policy?

A deductible is the amount of money that will be subtracted from any future claims payouts; it's your contribution to the claim. It applies to each covered claim. You choose your deductible amount, which typically ranges from $250–$2,500 for renters, and $500+ for homeowners.

What are the deductibles for homeowners insurance?

Typical homeowners insurance deductibles range from $500 to $2,000 , though lower and higher amounts may also be available. However, not all home insurance deductibles are flat dollar amounts. Instead, some are percentages of your home's insured value, such as 1% or 2%.

What is a $500 deductible for renters insurance?

For example, suppose a candle falls in the living room and starts a fire. It will cost $5,000 to replace the damaged furniture and drapes. If you have a $500 deductible, you will have to pay that amount and your insurance will pay the remaining $4,500 . Not all coverages have a deductible.

Is it better to have a $500 deductible or $1000?

If you're more likely to get into an accident, you won't want to pay out a higher deductible. However, if you're generally a safer driver, your car insurance premiums will be lower with a $1,000 deductible .

What Are Home & Renters Insurance Deductibles? (2024)

Your homeowners or renters insurance deductible is what you pay out of your own pocket for a loss or repair that's covered by your policy. Suppose you have a $1,000 deductible for home insurance or renters insurance and the cost of covered damages comes to $3,000. Your insurance company would subtract your deductible of $1,000 from the total cost of the covered damages and pay out $2,000.

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How does a deductible work for homeowners insurance?

Your homeowners insurance deductible or renters insurance deductible will apply for each claim you file. Your insurance company will only pay for covered losses above your deductible. If your home is completely destroyed (resulting in a total loss), your insurer may pay up to the limit of your coverage, minus your home insurance deductible.

What is the standard deductible for homeowners insurance?

Homeowners deductibles generally range between $500 and $5,000, depending on your insurer. Keep in mind that your homeowners insurance policy includes several coverages, and not all of them will have a home insurance deductible. Here's the breakdown:

Home insurance coverages that generally have a deductible

Home insurance coverages that typically don’t have a deductible

Personal liability coverage (Coverage E)
See Also
5 Reasons Why You Need Renters Insurance | McGriff Homeowners Insurance vs. Renter’s Insurance: What’s the Difference?What's the Difference Between Homeowners and Renters Insurance?Renters Insurance vs. Homeowners Insurance
Medical payments to others (Coverage F)
Insurance riders or scheduled items
Loss of use coverage (Coverage D), depending on your insurer or policy

How does a deductible work for renters insurance?

Renters insurance deductibles are applied the same way as homeowners and condo insurance deductibles. If you file a claim on a covered loss, your insurer will pay you the amount above your deductible, up to your policy’s limit.

How to choose the right deductible for homeowners insurance

Deciding on a deductible for home insurance comes down to what you can comfortably afford in both the short term and the long term. You may decide a higher deductible is your best option, as it will lower the long-term cost of your home insurance premium. Just keep in mind that if you have to file a claim, you'll need to have the funds to cover your higher home insurance deductible immediately available.

Do you want to pay less for insurance or less for repairs?
If you want lower out-of-pocket expenses for unexpected repairs, go with a lower deductible (and higher premium). If you prefer a lower insurance premium, choose a higher deductible, and expect to pay more when you file a claim. Learn how to get cheap homeowners insurance.
How much can you afford to pay out of pocket?
Generally, your deductible shouldn’t be higher than what you can afford to pay out of pocket because if you file a claim, you'll be responsible for paying your deductible.
Depending on your state and the insurance company, you might have a separate homeowners insurance deductible for certain perils such as hail or windstorm damage. This may also include damage from tornadoes, damage from hurricanes and earthquakes.
When do you pay the deductible for homeowners insurance?
Your insurance company will typically subtract your home insurance deductible from the total amount of your claim. You would be responsible for the unpaid expenses related to the claim. Learn more about the process for property insurance claims.