Are you considering buying homeowners insurance but don’t understand the policy terms? You’re not alone.
Many homeowners struggle to understand the different deductibles and what they mean for their coverage. One type of deductible often mentioned in homeowners insurance policies is an all perils deductible. Let’s look at what this type of deductible means and how it works.
WHAT IS AN ALL PERILS DEDUCTIBLE?
An all perils deductible is a specific type of deductible that applies to any loss or damage caused by a covered peril, regardless of where it occurred in your home or property.
This means that if you have a single all perils deductible, it will apply whether an act of nature like a hurricane or wildfire or something like water damage from a broken pipe, vandalism, or theft caused the damage.
How Does the All Perils Deductible Work?
An all perils deductible works like any other type of insurance deductible — you must pay for any repairs up to the amount specified in your insurance policy before the insurer will pay for any damages beyond that point.
For instance, if your policy has a $500 all perils deductible and there is $1,500 worth of damage to your home because of a storm, then you would need to cover the first $500 out of pocket, and your insurer would cover the remaining $1,000 after that.
How Do I Make Sure I Have A Single All Perils Deductible?
The deductible is one of the most important features to consider when purchasing an insurance policy, as this is the out of pocket expense you will face in the event of a covered loss. Be sure to confirm that your desired deductible is included in your quotes and contracts.
OTHER DEDUCTIBLES FOR HOME INSURANCE
Depending on where you live, homeowners may have a single deductible for their insurance policy, or potentially a couple depending on the peril. In several states, homeowner policies may include separate deductibles for wind, hail, and earthquake losses. Double-check with your carrier for any specialized deductibles you may need to pay. In Florida for example, the hurricane deductible may be aggregated and applied to an entire hurricane season. This protects homeowners from having to pay their deductible multiple times if their home suffers damage from several hurricanes in the same year. There are rules that apply, so check with your company or agent for details about your policy.
Since the all perils deductible is a flat amount that a policyholder must pay in the event of a claim (no matter which peril caused the loss or damage), it stands to reason that the deductible amount is critical.
That said, all peril deductibles are just one part of homeowners insurance policies; understanding them can help ensure you make informed choices when selecting and renewing policies for your home and property. If you’re ever unsure about anything related to your homeowners insurance policy, always consult with a professional who specializes in these types of policies so that they can explain things in more detail and advise on how best to protect yourself financially should something unexpected happen in your home.
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