Definition
Deductibles can be fixed dollar amounts, percentages of coverage, or special named-storm deductibles. Understanding the difference affects out-of-pocket costs.
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Deductibles include fixed dollar amounts ($500, $1,000), percentage of coverage (2-5%), and named storm deductibles. Higher deductibles reduce premiums but increase out-of-pocket costs. Percentage deductibles are common in hurricane-prone areas. Understanding deductible types helps balance cost and protection.
Pro Tip
Consider emergency fund capacity when choosing deductibles.
Example
A $1,000 deductible means homeowner pays first $1,000 of covered losses; insurer pays remainder.