Homeowners Insurance Deductible. What is it and why does it matter?
Hail destroys your roof, wind tears off the siding, the sump pump stops working and your basement floods or the bottom fell out of the water heater. Now what?
When you file a claim on your homeowners’ insurance there are many things to consider. One of those is your deductible. What is that? The deductible is the amount of the cost of the claim that you, the insured, are responsible for in the repair or replacement of what is damaged or lost. Simple enough, but the deductible can be very confusing and complicated when you read your policy.
The confusion comes in how insurance carriers require home owners to cover their portion of the repair. There are a couple areas that are important to understand. First, how do the insurance companies determine the money required. Second, how to insurance companies apply this to claims.
Deductibles on home insurance policies in Kansas can be determined in two different ways.
Flat Deductible: This is when all perils including wind and hail have the same deductible such as $1,000 or $2,500. For most but not all people this is like your car insurance. You $500 comprehensive and collision deductible.
Percentage Deductible: This deductible is based on a percentage of your dwelling amount on your home insurance policy. For example, if your dwelling amount is $300,000 and your deductible amount for wind and hail is 1% the amount you would be responsible for is $3,000.
So how is this applied to my claim? Kansas is a fairly large state and some of us are lucky enough to live in areas of the state that have had more claims than others. Specifically, wind and hail claims. What this means for you is that you may have a split deductible. One deductible for “all perils” and another separate deductible for “wind and hail”. Let’s break those down:
Wind and Hail: This deductible only applies to claims involving damage arising from wind, hail, tornado, or straight-line winds. Most likely in Great Bend and Barton county this is the type of claim you are most familiar with.
All Perils: This deductible applies to everything else that is not related to a wind or hail loss. This deductible would apply to sudden water loss, fire, smoke damage.
Now you know what types of deductibles are out there and the perils those deductibles cover and how they can split in Kansas. So, who decides which one gets used for what? The insurance carrier does. All carriers approach deductibles differently. We have carriers that will only issue policies with percentage wind hail deductibles, slightly higher flat wind hail deductibles and carriers that offer flat all peril and wind hail deductibles. Working with an independent insurance agent will help you find the right combination of value and deductible to maximize your coverage.
Selecting the right deductible schedule is a key component to finding the best fit for your Great Bend home insurance policy and now you can approach this with a little knowledge!