Filing a claim for a loss on your homeowner’s insurance policy does not have to be challenging, but you should know what your financial responsibilities are. Here’s a closer look at deductibles and how your Cape Coral insurance agency can help you.
What Is an Insurance Deductible?
An insurance deductible is the amount of money you pay when a loss occurs before the insurer pays the rest. Deductibles are common, though the amount can differ from one policy to the other. The property owner can also adjust their deductible to reduce or increase their premium costs. There are two forms of deductibles Florida homeowners should understand:
All Other Perils Deductible:
An All Other Perils (AOP) deductible is nearly always in place on a homeowner’s insurance policy. It is a fixed number. For example, if a loss occurs, and you have $2,500 worth of damage with a $500 deductible, the insurance company may pay you $2,000 and you will be responsible for the rest. This is the amount you pay for each occurrence or loss.
Hurricane Deductible:
A hurricane deductible applies to damages brought on by a hurricane. In Florida, when a hurricane watch is issued, the hurricane deductible goes into effect. This deductible works in the same basic manner as an AOP deductible but are calculated a bit differently. The deductible is based on the property’s dwelling value rather than a fixed amount. It is typically between one and five percent of the property’s dwelling value.
The hurricane deductible applies when a hurricane watch or warning has been issued for any part of Florida by the National Hurricane Center and ends 72 hours following the termination of the last hurricane watch or hurricane warning issued for any part of Florida by the National Hurricane Center. The hurricane deductible applies to damage done during this time.
Is Your Homeowners Insurance Effective?
You have some flexibility in selecting a homeowner’s deductible including AOP and hurricane deductibles. A higher deductible tends to reduce your premium costs. But, you will need to have this amount in order to pay for the damages out of pocket. If you are unsure if your deductibles are ideal, contact our Cape Coral insurance agency to learn more.