What is a deductible and how does it work in a claim?

A deductible is the amount you pay out of your own pocket before your insurance starts paying on a covered claim. When you have a loss, the carrier subtracts your deductible from the covered amount and pays the rest. It is your share of each claim, and choosing the right deductible is one of the most important coverage decisions you make.

The math is simple. If your deductible is $1,500 and you have a covered loss of $10,000, the carrier pays $8,500 and you cover the $1,500. If the loss is smaller than your deductible, the carrier pays nothing and the repair is entirely yours. That is why deductible size matters so much: a higher deductible lowers your premium but raises what you pay when something happens.

Home policies in Georgia often have more than one deductible. You may have a flat dollar deductible for most losses, plus a separate percentage deductible for wind and hail, which is common in storm-prone areas. A percentage deductible is figured from your home’s insured value, not the repair cost, so it can be much larger than you expect.

Here is an example. A home in Valdosta is insured for $300,000 and carries a 2 percent wind and hail deductible. A spring storm causes $25,000 in roof damage. The wind deductible is 2 percent of $300,000, which is $6,000, not a flat $1,000. The carrier pays $19,000 and the homeowner covers $6,000. Many owners are surprised by this, which is why it pays to know your deductibles before a storm.

Picking a deductible is a balance. A higher deductible saves on premium and discourages small claims that can raise future rates, but you need enough savings to cover it after a loss. A lower deductible costs more each year but cushions you when something goes wrong. We can model both for you so the choice fits your budget. To review your deductibles and make sure they match your situation, request a free coverage review and we will walk through the numbers together.