Deciphering Insurance Deductibles & What Every Homeowner Should Know

Deciphering Insurance Deductibles in Palm Bay, FL: What Every Homeowner Should Know

Your Florida homeowners policy has an insurance deductible, which is the amount of money you will need to pay out-of-pocket for a covered claim before your insurance company pays anything. You can typically choose your deductible cost, but lower deductibles may mean higher insurance premiums. To better understand how to choose the right property coverage deductible for your home, you must first understand how insurance deductibles in Palm Bay, FL, work. Here is your homeowner’s guide to deciphering insurance deductibles.

What Is an Insurance Deductible?

An insurance deductible is the dollar amount that you are responsible for meeting during the calendar year of coverage before your homeowners insurance policy provider will pay for covered damages. If you have a $10,000 deductible and need to replace your roof, you will need to pay the first $10,000 towards your roof replacement before your insurance company covers the rest. Your deductible can be paid over multiple claims during the year, so if you need to repair storm damage in your basement and then later need to file a claim for foundation repair, you can use out-of-pocket costs from both towards meeting your deductible.

Types of Home Insurance Deductibles Explained

There are two types of homeowners or condo insurance deductibles: flat-rate deductibles and percentage deductibles. Let’s take a look at both to see how they differ:

• Flat-Rate Deductibles – A flat-rate deductible is a set dollar amount that you must pay out-of-pocket before your insurance company pays anything. It generally applies to covered damages due to theft, fire, and water.
• Percentage Deductibles – A percentage deductible, which is the most common type of homeowners insurance deductibles in Florida, requires that you pay a percentage of your home’s total insured value as your deductible. For instance, if your home is insured at $300,000 and you have a 2% deductible, you will need to pay $6,000 out-of-pocket before your insurance company pays anything.

How Deductibles Impact Homeowners in Palm Bay, FL

Florida property coverage deductibles are usually percentage deductibles. This is because homes in Florida are at such a high risk of weather-related damage from hurricanes, tornadoes, floods, and storms. The amount of money you will have to pay out-of-pocket is directly connected to the overall insured value of your home. The most common percentage deductibles used by Florida insurance companies are 2%, 5%, and 10%. Rather than using multiple claims to meet your fixed deductible, you only have to pay a percentage deductible once in a calendar year, even if you have multiple claims during that period. To reduce your deductible’s impact as a homeowner, you should:

• Carefully review your homeowners’ insurance policy each year.
• Stay up to date on home inspections and maintenance.
• Keep careful home maintenance and repair records.
• Hold on to all receipts and documentation related to maintenance, damage, and repairs.

Tips for Choosing the Right Deductible

To make sure you’re choosing the right deductible for your homeowner’s insurance policy, you need to weigh the monthly premium amount against the amount you can afford to pay out-of-pocket. While higher percentage deductibles may mean lower annual insurance premiums, they also mean larger out-of-pocket costs. Here are some tips for choosing a homeowners policy deductible:

• Evaluate your savings and determine if you have enough to cover major home repairs after an emergency or storm.
• Review your monthly and annual budgets to see how much strain an unplanned emergency would put on your household.
• Compare how much you can save on your premium annually with a higher deductible vs. a lower one.
• Weigh your risk tolerance, as a high deductible means more financial risk in exchange for a lower monthly premium.
• Understand the difference between a standard flat-rate deductible and a percentage deductible.
• Consider your mortgage lender requirements, as your lender may require a maximum deductible amount.
• Evaluate the frequency of claims made in the prior calendar year, or try to determine how many claims you might file in the next year.
• Get your home appraised to determine how much insurance coverage you will need.
• Consult with a licensed professional insurance agent.

Our Approach to Home Insurance Deductibles

Advanced Insurance Net specializes in comprehensive, reliable insurance options. We have over 30 years of experience in the industry, and a team of skilled, knowledgeable insurance specialists. We offer guidance and application assistance for a range of different types of Florida insurance, including homeowners, auto, renters, commercial, boat, RV, flood, and hurricane insurance. We take a highly personalized, proactive approach to helping our clients choose a home insurance deductible. During an in-depth insurance consultation, we will guide you through the process of evaluating your risk tolerance, home value, insurance needs, and claim frequency so that you can make an informed decision.

Call for Expert Homeowners Insurance Advice in Palm Bay, FL

We are dedicated to providing each client with the ideal insurance coverage for their personal needs, budget, and risk level. We understand the unique challenges that face Florida homeowners, and we work closely with each client to ensure they are fully covered and protected. Our commitment to personalized insurance solutions, comprehensive coverage options, and reliable and experienced guidance makes us the go-to insurance specialists for homeowners’ insurance coverage. Call us now or contact us online for expert guidance in evaluating homeowners’ insurance deductibles in Palm Bay, FL.