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  • AZ Insurance Team

How do homeowners insurance deductibles work?

Updated: Aug 4, 2020

Homeowners insurance is a form of property insurance that covers losses and damages to someones house and their assets in the home. Homeowners insurance also covers accidents in the home or on the property. Homeowners insurance is mandatory to as long as you have a mortgage to pay off and even after your mortgage is paid off it is highly recommended to keep.

Perils covered by homeowners insurance

The most common perils covered by homeowners insurance are:

  • Fire and smoke damage

  • Lightning strikes

  • Windstorms and hail

  • Explosion

  • Vandalism

  • Damage from an aircraft, car or vehicle

  • Theft

  • Falling objects

  • Weight of ice, snow or sleet

  • Water damage

Insurance policies differ so it is very important to discuss with your insurance company the different policies and what they cover or do not cover to find the right one for you.

When is your jewelry covered by homeowners insurance?

Most insurance policies cover jewelry up to a certain extent, but it is important to know that you should ensure your jewelry on your policy separately to ensure full protection from theft or damage. The most common homeowners insurance policies will only cover up to a couple grand in jewelry. If you have a $15,000 engagement ring in your house and it burns down, your insurance company will only cover a couple thousand dollars in value. If you have expensive jewelry that is worth more than what is typically covered in your insurance policy then you should purchase an additional endorsement. This is how you raise the coverage limits on expensive personal property such as jewelry or family heirlooms that you may own.

When do you pay your deductible?

You pay your deductible when you file a claim to your insurance company. You pay your deductible which typically varies from $500 to $1500 depending on your policy and then your insurance company will pay the rest. For example, if there is a fire in your kitchen that causes $5000 in damage and your deductible is $1000, than you are responsible for paying the $1000 deductible and your insurance company will cover the remaining $4000.

What is a wind or hail deductible?

A wind or hail deductible is a higher deductible that applies to loss caused by wind or hail. The deductible is often expressed as a percentage of the value of the property, or in a homeowners policy as a percentage of the dwelling limit. Wind or hail deductibles are necessary to accommodate with costs to storm damage. Wind and hail deductibles are most common in the states that often have severe storms and tornadoes. The most common states include Texas, Oklahoma, Kansas, and Nebraska.

How do percentage deductibles work?

A deductible can either be a dollar amount or a percentage of the total amount of insurance on a policy. Percentage deductibles only apply to homeowners insurance policies and are calculated based on a percentage of the home's insured value. For example: if your house if insured for $200,000 and your insurance policy has a 1 percent deductible, $2000 would be deducted from any claim payment that is made.

AZ Insurance Team 480-535-5709

*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*

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