What does the deductible mean in a home insurance policy?
When taking outhome insurance, the “deductible” always comes up. Every insurance policy may include a deductible. A deductible means that, in the event of a claim, you are responsible for paying a portion of the damages yourself.
Mandatory and Voluntary Deductibles
A distinction is made between a mandatory and a voluntary deductible.
Homeowners insurance policies usually do not include a mandatory deductible. If there is a mandatory deductible, it is often around €100 or €150.
With some insurers, you can choose your own deductible. With a voluntary deductible, you can decide how high your deductible will be. The rule is: the higher your deductible, the lower your premium.
Don’t forget to keep in mind that you’ll have to pay the deductible again for each claim. Another thing to consider is whether you can easily afford to pay the deductible out of pocket in the event of a claim—even if this happens several times a year. To what extent is this feasible for you, and does it outweigh the premium discount you receive with a higher deductible?
A mandatory deductible
In certain situations, the insurer applies a mandatory deductible.
This occurs, among other things, in the following cases:
- Storm Damage
Storm damage is, of course, unpleasant enough, and you naturally want the damage caused by the storm to be repaired as quickly as possible. With home insurance, you must payan deductible for storm damage before you receive compensation. This amount is usually €150. You can choose to increase or decrease this amount yourself. A higher deductible applies to storm damage than to most other types of damage. Generally, you pay a deductible equal to two thousandths of the amount for which your home is insured. This amount is usually between €200 and €500 but varies by insurer. - Living in a Large City
If you live in a large city, you usually have to pay a mandatory deductible of €225 in the event of theft or burglary. According to insurers, you are more likely to suffer damage if you live in a large city. - Damage Caused by Your Own Actions
Only if you have comprehensive home insurance will you be required to pay a mandatory deductible if you unexpectedly cause damage through your own actions. The deductible is usually between €50 and €100.
Choosing a lower premium or a higher deductible
Of course, you’d prefer to have the lowest possible monthly payments, but at what cost? You’ll naturally want to avoid having to pay a lot of euros out of pocket in the event of a claim. Even if you’ve never had a claim, it could still happen to you several times in a single year. By comparing policies, you can more easily save on your monthly payments. That way, you can choose the lowest premium while still getting the best home insurance.
How is the deductible calculated?
Suppose you have €2,000 in damage to your back door and door frame due to a break-in. If you have a deductible of €250, the insurer will only partially cover the repair bill. You’ll have to pay the rest to the repairer yourself. Alternatively, the insurer may cover the entire repair bill and then recover the €250 from you.
So it’s best to choose a home insurance policy with no deductible. By comparing home insurance policies, you can keep your premium low.
How much is your deductible under your home insurance policy?
When comparinghome insurancepolicies, the deductible also plays a key role. It makes quite a difference whether the insurer pays you the full amount of the claim or whether you have to pay €500 out of pocket. The amount of the deductible may also depend on the cause of the damage.
With home insurance, you insure your home against damage caused by fire, burglary, and storms. After a loss, the insurer pays out an amount that allows you to repair the damage. However, insurers often pass on a portion of the cost of claims to the policyholder. Applying a deductible reduces the amount the insurer pays out for each claim. And the insurer is not required to process minor claims that do not exceed the deductible. This, in turn, results in lower costs for the insurer.
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