Home Insurance Deductibles: What You Need to Know

When buying a home, your mortgage company will require you to purchase homeowners insurance. Lenders want to ensure their interest in the property is protected if an unfortunate disaster damages it. Our knowledgeable agents at Paragon Independent Insurance Agency in Plano, TX, are here to help.

The deductible is one of the most important decisions to make when choosing a homeowners policy. We are here to help you fully understand what a home insurance deductible is and which is best for you.

What is a Home Insurance Deductible?

A home insurance deductible is the money you must pay out of pocket when filing a claim before your insurance kicks in. To be more clear, you don’t pay the money to the insurance company. Instead, the company pays for the damages for a covered loss minus your portion, which is the deductible.

For example, if you have losses estimated at around $5500 after fire damage to your kitchen, your insurance company pays for the amount of damage minus the deductible. So, if you have a $1000 deductible on your home insurance policy, the insurance company would issue a payment for repairs of $4500; you would be responsible for paying the other $1000 (the deductible).

The deductible isn’t just a one-time payment. You will be responsible for paying a deductible out of pocket every time you file a homeowner claim. However, if the damages are under your deductible, you wouldn’t need to file a claim but pay out of pocket for the repairs.

Lastly, the lower the deductible you choose when purchasing your homeowner’s policy, the higher your premium payments will be. For instance, taking out a home insurance policy with $500 deductibles would be more expensive than choosing a $1000 deductible on your policy. A licensed insurance agent can help you look at your options and make the best decision for your specific needs.

Reach out to us today!

At Paragon Independent Insurance Agency in Plano, TX, we’re a knowledgeable agency experienced in helping Texans protect their families and properties when the unthinkable happens. Let us help you today. Call us at (972) 473-4813.