Insurance can be tough to figure out sometimes! A lot of carriers have so many options when it comes to deductibles and the effects that it has on your yearly premium payment, that it can be a little bit overwhelming. Actually, most people don’t know what their deductible is in most cases. Why is a deductible so important? Because that’s how much comes out of your pocket before the insurance company gets involved, and if a Named Storm strikes, you want to be sure you know about the coverage that you have.
What Are the Different Types of Home Insurance Deductibles when a Named Storm Hits?
You have several options! The first thing you need to do is check your current policy if you have one. If you’re shopping around for insurance, then you’re in the right place. In South Carolina, most companies offer a flat deductible. Some are as low as $500, but the standard is generally $1000. So, if a hurricane comes through and takes your roof off, you would pay $500 or $1000 to replace the roof. Easy, right?
It gets more complicated though. A lot of the time people want the cheapest home insurance available, because they think that they’ll never need it! Generally, if the deductible is low, the home insurance annual premium (the amount that the client pays the insurance company every year), is higher than a home insurance policy with a higher deductible. Generally, to offset the cost, the first thing that changes is the deductible, so you sometimes see people with $2500, $5000 and even more when it comes to a flat deductible!
Another type of deductible is a percentage deductible. In South Carolina the three popular ones are 1%, 2%, and 3% deductibles.
What does this mean?
Simple math: if you have a $200,000 home and your roof is blown off, and you have a 1% deductible, you’ll pay $2,000 before the insurance company gets involved. If you’re at 2%, you’ll pay $4,000 before the home insurance company gets involved. If you’re at 3%, you’ll pay $6,000 before the home insurance company gets involved. The average 1500 square foot roof costs $7,875 to fix (National Average), so look at your current deductible and make sure that it is justified if a Named Storm comes blowing in!
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