At Insurance Over Texas in Houston, TX, we understand how confusing insurance jargon can be. Our goal is to ensure you have the security and peace of mind that your house is protected in the event of a covered, yet unfortunate incident that may cause damage.

What Is a Deductible? How Does It Work?

One of the least understood terms in insurance is "deductible." The deductible is the amount of money you, as the policyholder, must pay first before your insurance covers certain claims on your policy. Once the deductible is paid, your insurance policy covers its portion of the remaining repair costs, as outlined in the policy terms. For example, if it costs $5,000 for parts and labor to repair your kitchen after a small fire, and you have a $1,000 deductible on your home policy, you would pay $1,000, and the insurance company would pay the remaining $4,000.

Other Information About Deductibles

You choose the deductible—the amount you pay out of pocket for a claim—when you initiate your policy. Keep in mind that the higher the deductible you select for your home policy, the lower your premiums will be. Conversely, the lower your deductible, the higher your premiums will be. For instance, if your deductible is $500, you can expect a higher premium for your insurance than if it were $750, $1,000, or higher.

Traditionally, most companies offer deductibles in whole dollar amounts. Others provide options as a percentage of your total claim amount. For example, rather than having a whole dollar amount for your deductible, like $1,000, some policies may require you to pay 5%, 10%, or a higher percentage of the initial claim assessment as the deductible.

We Are Here to Help!

To learn more about home insurance, ask questions about deductibles, and find the best options for you, please call Insurance Over Texas in Houston, TX, at (281) 752-6704 to schedule an appointment. We would love to help. For general inquiries, email our owner at martha@insuranceovertexas.com.