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What Are Insurance Deductibles?

By Phyllis Ryser

What are Home Insurance Deductibles?

Many people are confused about the deductibles on their home insurance policy. What does "deductible" mean? Is there more than one deductible on a house insurance policy? When does the deductible come into play on an insurance claim? Is it paid for each claim or is it paid by the year? How much is the deductible? All these questions can be confusing. Maybe I can shed some light on this question.

For a house insurance policy the deductibles are usually taken out of every claim. For each claim filed a deductible must be met before the claim will be paid. This amount can also be called"co-pay." It is the amount a homeowner agrees to pay before the insurance company pays anything on the claim.

There are two kinds of deductibles on a homeowner's policy. One is for windstorm and hail claims. This deductible is called "Clause 1 Deductible." Since there are so many hail and windstorms in Texas most all Texas Homeowners Insurance policies require the Clause 1 Deductible to be 1% of the value of the dwelling. For example if the house is insured for $100,000. The deductible for a windstorm or hail claim is $1000 or 1% of $100,000.

The second deductible on a home insurance policy is called "Clause 2 Deductible." It is for all other losses, such as fire, water damage, lightning, theft, and other kinds of losses. The Clause 2 deductible can be the same amount as Clause 1 or it may in some cases be less. It depends on what the homeowner wants to buy.

The deductible for losses on the house is the same for losses on unscheduled personal property. For example if the homeowner suffers a theft claim where only the personal property in the house is involved, the same deductible that applies to the house applies also to the personal property. If both the house and the personal property are in damaged in an sudden and accidental event only one deductible is taken off the claim settlement.

Some homeowners choose a larger deductible or a 2% deductible. The 2% deductible policy would cost less money but the deductible on a house insured for $100,000 in the event of a hail loss would be $2000.

The less the deductible the more the insurance policy costs because the homeowner is agreeing to pay less co-pay. This means the homeowner wants the insurance company to be responsible for more of the loss. The high deductible policy is a good way to save money. If the homeowner can afford to pay smaller losses the higher deductible may be a good savings. If there are no losses for 2-3 years the amount of premium saved is more than the deductible.

Country Side Insurance

Phone 903-378-7300



Check us out on the web. http://www.countrysideins.com/insurance-quotes/home-insurance

If you have other questions about your home or auto insurance policy we have many articles, podcasts, and videos on our website to help you make good decisions about your insurance policies. We want you to understand the products you need before you spend your hard earned money on insurance.

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