Financial Protection flipbook 2024

Pay Attention to Deductibles A deductible is the amount a policyholder must pay out of pocket before the insurance company pays the covered amount on a claim (up to the policy limits). Standard homeowners policies typically have a flat deductible such as $500 or $1,000. In some states where there is a greater risk of a major catastrophe, higher deductibles may apply to some forms of coverage. A hurricane, for example, may trigger a specific deductible that is set as a fixed percentage, typically starting at 2% and reaching up to 15% of the policy limits. If a property is insured for $200,000 and the policy has a 2% hurricane deductible, for example, the first $4,000 must be paid by the homeowner. Claims for damage caused by windstorms or hail may be structured in a similar fashion. Homeowners Insurance Claims (weighted average, 2017–2021) The average property damage loss during this period was $14,935. Source: Insurance Information Institute, 2023 (most current data available) $12,514 $83,519 Wind and hail $4,646 Theft $12,913 Water damage and freezing Fire and lightning