When it comes to understanding your homeowners insurance policy, the deductible is a critical piece of information to be aware of. As an essential part of the claims process, the deductible is the amount you’ll have to pay out-of-pocket before the insurance company steps in to cover the rest of the damage. So, what is a normal home deductible? The most common deductible that homeowners opt for is $1,000 for flat deductibles. However, other amounts such as $500 and $2,000 are also typical. Of course, the deductible you choose will impact the cost of your insurance policy. Selecting a higher deductible will typically result in lower monthly premiums, while a lower deductible will cause your premiums to be more expensive. Here are some things to consider when choosing your deductible amount:
Consider your finances: Can you afford to pay a higher deductible out-of-pocket if an accident occurs? It’s important to establish a deductible amount that you can comfortably afford in case of an emergency.
Weigh the costs: Be sure to weigh the cost savings of a higher deductible versus the peace of mind you may receive from a lower amount.
Take your risk tolerance into account: If you’re comfortable taking on more of the financial risk in the event of an accident, a higher deductible may work for you.
Understand your policy: Check with your insurance company to make sure you understand how your deductible works and what is covered in your policy.