![]() "Percentage deductibles are based on the estimated cost to rebuild your home, not the market value or the amount of the covered loss," says Ben Liebermann, a Digital Product Manager at USAA. Fixed dollar deductibles are an exact amount and don't change with the rebuild value of your home.Percentage deductibles are a percentage of your "dwelling limit" and change if the rebuild value of your home changes.In most places, deductibles can be either a fixed dollar amount or a percentage. Understanding which you have is important, as it can have a big impact on your out-of-pocket costs if you have to file a claim. The concept of a deductible may seem straightforward, but here's where things can get tricky. What's the difference between a percentage deductible and a flat-rate deductible? Typically, the claim payment issued by your insurance company is for the total amount of the loss minus your deductible. You and your insurance company agreed to the deductible amount when you bought your policy. But before they cover your loss, you have to pay a deductible.Ī deductible is the out-of-pocket amount you pay before your insurance pays the rest of a claim. If a disaster or theft happens, you file a formal request, or "claim," with your insurance company. They'll help cover the cost of repairing or rebuilding your home, as well as damage and theft of personal belongings. ![]() In return, your insurance company promises to pay for damage, up to your policy's limits, in the case of a disaster. Here are the basics: You get a policy and agree to pay a premium for coverage you select. ![]() This can help lessen any overwhelming feelings of having to file a claim if you experience a covered loss. But it's important to know the ins and outs of how your policy works. After all, it's required for anybody who has a mortgage. If you've ever owned a home, you may think you know the drill about homeowners insurance.
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