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In general, a deductible in an insurance policy means the amount that you pay out of your pocket from your insurance claim before your insurance provider pays out for the rest of the loss amount. In the same manner, a deductible of a homeowners' insurance policy is the amount that you as an owner of the home (who has taken the policy) pay towards the claim of the policy before the insurance provider pays its part.
So, in short, the subsequent payment of the claim that you get from your insurance provider is the total loss amount minus the deductible.
Most of the time, you pay the deductible of your homeowners' insurance policy according to a per-claim basis. This means, if your home gets damaged two times just in a month, then you will have to pay two different deductibles.
On the other hand, if one homeowner's claim includes the coverage of two or more properties, then you will have to pay only one deductible. This means, if the structure of your house, personal property, and your garage are damaged by fire in your house, then you can report your homeowner's insurance policy and get the claim, however, you will need to pay the out-of-pocket expenses (deductibles) only once.
It is very important to recognize that the deductibles in home insurance are quite different from than deductibles of the home insurance policy. With a health insurance policy deductible is the fixed amount that you have to pay while making a claim. For example, if the deductible of your health insurance policy is Rs. 5,000, then you have to pay this amount whether your claim amount is Rs. 10,000 or Rs. 1,00,000.
On the other hand, in a home insurance policy, a deductible is the amount that you pay at every claim, regardless of how many claims you make in a year. So, if you live in an area where the chances of risk to your home are high, then you may have to make multiple home insurance claims and you have to pay from your pocket for all these times.
The deductibles of your homeowner's insurance policy can be of any of the below-mentioned types as per your insurance provider:
Now as you have seen the deductible part, you must also know how much insurance do you require to get for your home. Here we are discussing the same:
Before deciding the part of the deductible, you should have to decide the amount of home insurance that you require for your dream house. So, you must consider the following points while deciding the same:
The Final Words!
The amount that you pay as the premium of your homeowner's insurance policy is directly related to the deductible that you have selected. If the deductible is high, then you have to pay a low premium and if the deductible is low, then the premium amount increases. So, when deciding the deductible of your home insurance policy, you must consider the amount that you can afford to pay when making a claim.