Ieuter Insurance Group Blog

All You Ever Wanted to Know About Insurance

Percentage Deductibles

Do you ever look at your insurance declaration pages in detail at the time your policy issues or renews?  Or do you search for them or call your agent once you have a claim asking about the amount of your deductible?

 A deductible is the amount that you, the policy holder, will be responsible to pay first before the insurance carrier pays the balance of the claim, up to the policy limits.

The deductible is most often a fixed dollar amount.  A common deductible would range from $500 to $5,000 dollars typically.

 If your insurance policy calls for a percentage deductible, it's time to dig deeper and read the fine print.  Property deductibles will often times be 2%-5% for damage caused by wind or hail.  If the deductible is a percentage of the building limit, this can a big surprise come claims time.  For instance, for a condo association or apartment building valued at $3M, a 5% wind and hail deductible would be $150,000! 

This is a substantial amount and needs to be understood by the policy holder as part of their risk management strategy. 

 Some carriers offer the ability to buy down the percentage deductible or even go to a fixed amount deductible.  Know your policy and talk to agent to avoid an unwanted surprise in the event of a claim.