Deductible

When a covered event damages your home or belongings, the deductible is your share of the claim. The insurer generally calculates the covered loss, subtracts the applicable deductible, and pays the eligible remainder subject to exclusions, coverage limits, and other policy terms. A deductible does not make an otherwise excluded loss covered.

For example, if a covered claim has $10,000 in eligible damage and a $2,000 deductible applies, you would generally be responsible for the first $2,000 and the insurer could pay the remaining $8,000, subject to the policy. The deductible is typically applied to each covered claim, not paid as a separate premium.

A flat-dollar deductible is a set amount, such as $1,000. A percentage deductible is calculated from a stated percentage of the insured dwelling limit, rather than the amount of damage. For instance, a 2% deductible on a $300,000 dwelling limit would equal $6,000. Confirm which coverage limit the policy uses as its calculation base.

In Galveston, coastal exposure makes it especially important to review whether the policy has separate windstorm, hail, or named-storm deductibles. These may be percentage-based or triggered by specific conditions defined in the policy. They are not interchangeable, and a hurricane deductible does not necessarily apply to every storm-related loss. Read the policy and declarations carefully to learn the triggering event, calculation, and covered property.

A higher deductible can reduce premium costs but leaves you responsible for more of a covered loss. Before choosing one, consider the amount you could pay out of pocket, the value of your home, and the deductibles that apply to different perils. Ask your insurer or agent to explain the policy’s deductible wording and confirm whether flood damage is covered by a separate flood policy; standard homeowners coverage generally does not cover flooding.