What Is a Deductible in Insurance and How Does It Affect Your Claim?

The deductible is one of the most important and often misunderstood concepts in the insurance world. At Trust Claims Consultants, we believe that informed policyholders are empowered policyholders. In this article, I explain what a deductible is, how it works, and why understanding it can make a significant difference in your claims process.

💡 What Is a Deductible?

• It’s the amount of money the insured must pay out of pocket before the insurance company covers the rest of the claim.

• It’s defined in your policy and can vary depending on the type of coverage (e.g., hurricane, windstorm, fire).

• It may be expressed as a fixed dollar amount (e.g., $2,500) or as a percentage of the insured value (e.g., 2% of the home’s value).

🧮 Practical Example

If your home is insured for $300,000 and you have a 2% hurricane deductible, your deductible would be $6,000. If hurricane damage is estimated at $20,000, the insurer would only pay $14,000.

⚠️ Types of Deductibles

• Fixed: A specific dollar amount.

• Percentage-based: Common in hurricane-prone areas.

• Per event vs. per policy term: Some deductibles apply per incident, others per year.

🧭 How to Choose the Right Deductible

• A higher deductible lowers your premium but increases your financial responsibility during a claim.

• A lower deductible means higher premiums but less financial impact when filing a claim.

🛠️ Practical Tips

• Review your policy before hurricane season.

• Make sure you can afford your deductible in an emergency.

• Consult with a public adjuster to understand how your deductible will apply in your specific case.

A deductible is more than just a number it’s a financial planning tool. Understanding it empowers you to make informed decisions and better protect your assets.

📞 Need Help Understanding

Your Deductible?

If you're unsure how your deductible applies, or if you're preparing to file a claim, Trust Claims Consultants is here to help. Contact us today to schedule a free policy review or claim consultation. Let’s make sure your coverage works for you not against you.

This article was written by Sergio Antonio Mora, Licensed Public Adjuster (FL #G024380), as part of his ongoing commitment to public education and consumer protection in the insurance industry.