Insurance deductible

What It Means

An insurance deductible is the amount you pay toward a covered loss before the insurer pays the rest. On a home or renters policyRenters insuranceA policy for tenants that pays to repair or replace their belongings, covers liability for harm they cause others, and pays extra living costs after a covered loss. See more it's usually a flat dollar amount, such as $1,000. Many coastal homeowners policies add a separate hurricane, named storm or windstorm deductible, set as a percentage of the home's insured value, which can come to several thousand dollars.

How It Sounds at Home

• "Our hurricane deductible is 2%, that's six grand."
• "It's under the deductible, so we paid for it ourselves."
• "We raised the deductible on the car."

The Breakdown

How to work out yours

1. Find the declarations page of each policy, home or renters and auto. It lists every deductible.
2. Note whether each one is a dollar amount or a percentage. Triple-I says standard homeowners deductibles can be either, such as $500 or $1,000, or 1/2% or 1% of insured value.
3. Look for a separate hurricane, named storm or windstorm deductible. Triple-I explains that a hurricane deductible applies only to hurricane damage, while a windstorm deductible applies to damage from any wind.
4. Turn each percentage into dollars: insured value × percentage. On a home insured for $300,000, 2% is $6,000.
5. Set aside savings toward your largest deductible so a claim doesn't land on a credit card.

Try it today. Pull up your home or renters policy and write down each deductible in dollars.

What the number means. With the example above, a $20,000 covered storm repair costs you $6,000 and the insurer pays $14,000. A $4,000 repair on the same policy would be yours in full, since it's below the deductible.

Good to Know

Triple-I reports that hurricane deductibles typically range from 1% to 5% of a home's insured value, and the NAIC's pages on named storm deductibles show how quickly a percentage adds up on a larger home. Which storms trigger a hurricane or named storm deductible, and in which states insurers may use them, is set by state rules and your policy, so check your policy's wording and your state insurance department's site. Health insuranceHealth insuranceA plan you pay a premium for that covers part of your medical costs, while you pay your own share through a deductible, copays and coinsurance. See more deductibles work differently and have their own page.

Related Terms and Categories

• Homeowners insurance claim

  A request to your homeowners insurer to pay for damage or loss the policy covers, backed by photos, a list of what was lost and your receipts.

• Renters insurance

  A policy for tenants that pays to repair or replace their belongings, covers liability for harm they cause others, and pays extra living costs after a covered loss.

• Insurance premium

  The amount you pay to keep an insurance plan, such as health insurance, in force, usually monthly, quarterly or yearly, whether or not you use any care.

• Hurricane prep

  Getting a home and household ready for a hurricane: knowing your evacuation zone, stocking supplies, protecting windows and acting on watches and warnings.

• Emergency fund

  Money set aside only for unplanned costs, like a car repair, a medical bill or a lost paycheck, kept where you can reach it quickly.

• Health insurance deductible

  What you pay on your own for covered health care before your health insurance plan begins sharing the cost.

Home maintenance and repairs