Do I Have to Pay the Deductible Before Homeowner's Insurance Will Pay?


The deductible is the amount you are responsible for paying when you file a claim on your homeowner’s policy. Your homeowners insurance costs less if you take on more of the risk. Once you file an insurance claim, you must pay the deductible. The insurance company then pays any remaining cost of the claim, subject to policy limits. Simply don’t file a claim if your claim is less than the deductible you must pay.

The Deductible

You can make your homeowners insurance more affordable by increasing the deductible. This, in turn, lowers the cost of your annual insurance premium. However, you must be able to handle the out-of-pocket cost if you need to file a claim. Average deductibles range from $250 to $300 for each claim. Raising the deductible to $500 can shave off about 10 percent of your annual premium. Choosing a higher deductible of $1,000 can save you 20 percent or more each year, according to the General Services Administration's (GSA's) website. Most insurance carriers allow you to choose your deductible, although sometimes a deductible is built into your policy and you can’t make changes.


If you file a claim on your homeowners insurance, you must pay the deductible before the insurance company will pay the balance up to your full coverage. You may decide that you can manage the cost of a small loss, especially if it makes your insurance premiums more affordable. Most times, in the case of a personal loss, the deductible applies to each separate loss. If you file more than one claim in the same year, you still are responsible for paying the deductible upfront.


Deductibles can save you money. When you pay more towards your loss, the insurance company, of course, pays less. For this reason, insurance carriers sometimes offer homeowners an incentive to pay a higher deductible by discounting their insurance premiums.

Offsetting the Cost

Opting for a higher deductible is one way to offset annual increases in premiums. For some homeowners, a deductible may lower a premium enough so that they can afford to purchase more coverage. Even if you can afford a higher premium, check with your mortgage lender before changing your policy. Some lenders limit the deductible you can choose. Also, sometimes a deductible is a percentage of a home’s insured value rather than a dollar amount. Talk to your insurance agent about the options available to you.

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