How Your Homeowners Insurance Deductible Works (With Examples)

Your homeowners deductible is the amount of a covered loss you pay yourself before insurance pays the rest. You usually don't write a check to the insurer; it simply subtracts the deductible from your claim payment.

That part is simple. What surprises people is that many policies have more than one deductible, and some are a percentage of your home's insured value, not a flat dollar amount. This guide explains how each type works, with state examples.

How a deductible works

The Texas Department of Insurance ↗ (TDI) defines a deductible as "the amount of a claim that you must pay yourself." Its example: on a $1,000 claim with a $300 deductible, the insurer pays $700.

The NAIC ↗, the national group of state insurance regulators, adds that the deductible applies to your home and personal property coverage and "is paid on each claim." Higher deductibles mean lower premiums.

Quick example

Say a covered kitchen fire causes $25,000 of damage and you have a $2,500 deductible.

• Covered damage: $25,000
• Minus deductible: $2,500
• Insurer pays: $22,500 (before any depreciation or other adjustments)

If the damage is $2,000, below your deductible, the claim pays nothing.

Different coverages, different deductibles

TDI notes that different coverages on your policy may have different deductibles (TDI ↗). Your declarations page lists them.

Flat vs. percentage deductibles

• Flat (dollar) deductible: a set amount, such as $1,000 or $2,500.
• Percentage deductible: a percentage of your home's insured value, usually your dwelling coverage limit, not of the damage.

The NAIC says that in some locations, catastrophe deductibles "are expressed as a percentage instead of a dollar amount."

How to calculate a percentage deductible

Multiply your dwelling coverage (Coverage A) by the percentage.

• $250,000 of dwelling coverage: 1% = $2,500, 2% = $5,000, 5% = $12,500
• $400,000 of dwelling coverage: 1% = $4,000, 2% = $8,000, 5% = $20,000

The Insurance Information Institute ↗ (Triple-I) uses this example: on a home insured for $300,000 with a 5% deductible, the first $15,000 of a claim is the homeowner's to pay.

Hurricane and wind/hail deductibles

Triple-I says percentage deductibles "typically vary from 1 percent of a home's insured value to 5 percent" and explains two main types (Triple-I ↗):

• Hurricane deductibles apply only to hurricane damage.
• Windstorm or wind/hail deductibles "apply to any kind of wind damage."

According to Triple-I, 19 states and Washington, D.C. have hurricane deductibles. What triggers them varies by state and insurer. It may be the National Weather Service naming a storm, issuing a watch or warning, or a storm reaching a certain strength.

State examples

Florida. Insurers must offer hurricane deductible options of $500, 2%, 5% and 10% of the dwelling limit, with some exceptions for higher-value homes (Fla. Stat. s. 627.701(3) ↗). The hurricane deductible applies "on an annual basis to all covered hurricane losses that occur during the calendar year." For a second hurricane in the same year, the insurer applies the greater of your remaining hurricane deductible or your regular deductible. Insurers may ask you to report or keep records of losses that fell under the deductible, so save those records. Policies with a separate hurricane deductible must carry a bold warning that it "may result in high out-of-pocket expenses." See our Florida page.

Florida roof deductible. Florida also allows a separate roof deductible of up to 2% of Coverage A or 50% of the roof's replacement cost, whichever is less. It doesn't apply to hurricane roof losses, total losses, certain tree-fall damage or repairs to less than half the roof, and you can opt out with a signed form (s. 627.701(10) ↗). If it applies, the insurer may limit the roof payment to actual cash value until you show proof you paid the roof deductible (s. 627.7011(3) ↗).

Texas. Triple-I notes that Texas windstorm deductibles can apply to wind and hail damage from any type of windstorm, not just named storms or hurricanes. See our Texas page.

New York. Triple-I reports that the event triggering a hurricane deductible varies among insurers. Some use a Category 1 hurricane, others Category 2.

California earthquake. The NAIC notes that homeowners policies don't cover earthquakes, so coverage is bought separately. The California Earthquake Authority offers dwelling deductibles of 5%, 10%, 15%, 20% or 25% of the Coverage A and B limit, with 5% and 10% unavailable for some homes. Its loss-of-use coverage has no deductible (CEA ↗).

These are examples, not a full list. Check your state's page and your policy. Our hurricane claim guide and roof and hail claim guide have more.

Never let anyone waive your deductible

Some contractors offer to "cover" or "absorb" your deductible. TDI is direct: "It's illegal for contractors to waive your deductible or help you avoid paying it," and contractors who do it "could be fined or go to jail." Inflating a repair bill to cover the deductible is insurance fraud (TDI ↗). Rules in other states vary, but treat this offer as a red flag anywhere.

Should you file a claim if damage is close to the deductible?

The NAIC suggests that if the repair cost isn't much more than your deductible, you might pay for repairs yourself. It notes that most insurers report homeowners claims to shared claim databases, and your claim history can affect your premium and renewal (NAIC ↗).

On the other hand, hidden damage can make a loss bigger than it looks. If you aren't sure, get a contractor's estimate before deciding.

Deductibles and public adjusters

A public adjuster usually isn't worth it when damage is near or below your deductible, since there may be little or nothing to recover after the fee. On larger losses, ask whether the adjuster's fee applies to the deductible portion. In Florida, a public adjuster can't charge a fee on the deductible portion of a claim (Fla. Stat. s. 626.854 ↗). See public adjuster fees.

If your loss is well above your deductible and the insurer's offer seems low, get matched with a licensed public adjuster.

This guide is general information, not legal advice. Deductible rules vary by state and policy.

Frequently asked questions

Do I pay my deductible to the insurance company?

Usually not. As the Texas Department of Insurance explains, the insurer subtracts the deductible from your claim payment. You then cover that amount when you pay your contractor.

How is a 2% hurricane deductible calculated?

Multiply your dwelling coverage by 2%. On a home with $300,000 of dwelling coverage, the hurricane deductible is $6,000.

Is the deductible per claim or per year?

Most deductibles apply per claim, according to the NAIC. Some hurricane deductibles work differently. In Florida, the hurricane deductible applies once per calendar year to all hurricane losses.

What's the difference between a wind/hail and a hurricane deductible?

A hurricane deductible applies only to hurricane damage. A wind/hail deductible applies to any wind or hail damage, per the Insurance Information Institute.

Can a contractor pay my deductible?

No. The Texas Department of Insurance says it's illegal for contractors to waive or help you avoid your deductible. Treat that offer as a red flag in any state.

Can I change my deductible after a storm?

Ask your agent how and when a change would take effect, and don't count on it applying to a loss that already happened. The best time to review your deductible is before renewal or storm season.