The Ultimate Truth About Insurance Deductibles

insurance deductibles

If you look closely at your property insurance, you will notice the part of the declaration page for insurance deductibles. Until recently, deductibles were always stated in a flat dollar amount.

In the last few years, however, insurance companies have started using percentage deductibles depending on the type and location of the property. Properties near a shoreline or beach usually have percentage deductibles. Hence, they can be applied to just wind/storm losses or for losses about the entire property.

People are often confused by percentage deductibles in that they believe that the percentage applies to the amount of the claim (i.e. 2% of a $10,000 loss would be $200). However, this is not the case. The percentage applies to the total value of the property stated on the declaration page (i.e. 2% of 1 $500,000 building coverage would be $10,000).

Please check “Understanding Your Insurance Deductible” for more information on deductibles.