Home Insurance Deductibles Explained: What You’ll Actually Pay (2025)

My coworker Marcus—this was back when I was still adjusting—bought a house in 2019. Nice place, older neighborhood. He was excited about it. Two years later hailstorm rolled through and destroyed his roof.

He filed a claim. Then called me absolutely furious.

“They’re telling me my deductible is $7,500. I thought it was $1,000!”

Turns out his policy had a percentage deductible for wind and hail. Not a flat dollar amount. A percentage of his dwelling coverage. House insured for $375,000. Two percent of that is $7,500.

Nobody explained this when he bought the policy. He assumed the $1,000 deductible applied to everything. It didn’t. And now he’s staring at a $7,500 bill before insurance pays anything.

This is one of the sneakiest things about home insurance.

Basic deductible stuff

A deductible is the amount you pay before insurance pays anything. $1,000 deductible and $15,000 claim means you pay $1,000 and insurance pays $14,000. Simple enough.

Except homeowners insurance insurance can have multiple different deductibles for different damage types. And some aren’t flat amounts—they’re percentages.

Flat vs percentage deductibles

Flat deductibles are what people expect. Pick an amount—$500, $1,000, $2,500. Pay that per claim. House worth $200,000 or $500,000, doesn’t matter. Same deductible.

Percentage deductibles are calculated as percentage of dwelling coverage. House insured for $400,000 with 2% wind/hail deductible? Your deductible is $8,000. More expensive home = higher deductible.

Percentage deductibles are increasingly common for wind, hail, hurricanes. Insurance companies use them to limit exposure in disaster-prone areas.

Problem is people don’t realize they have them. Policy says “2% wind/hail deductible” and people see 2% and think that’s not much. But 2% of $400,000 is $8,000.

You might have multiple deductibles

“All other perils” deductible—standard for most claims. Fire, theft, vandalism, burst pipes. Usually flat amount like $1,000.

Wind/hail deductible—separate, specifically for wind and hail. Often percentage. Sometimes higher flat amount.

Hurricane deductible—coastal states often have separate one just for hurricanes. Usually percentage, often higher than wind/hail.

Earthquake deductible—if you have earthquake coverage it almost always has separate percentage deductible. Typically 10-15% of dwelling coverage.

So you could have $1,000 for most claims but $7,500 for hail, $10,000 for hurricanes, $30,000 for earthquakes. All on same property. All potentially surprising.

Where percentage deductibles are common

Coastal areas—hurricane and wind deductibles standard from Texas to Maine. Closer to coast = higher percentage usually.

Tornado alley—Kansas, Oklahoma, parts of Texas and Nebraska.

Hail-prone regions—Colorado, Texas, Midwest.

Earthquake zones—California, Pacific Northwest.

In some places you literally can’t buy a policy with flat deductible for certain things. Percentage or nothing.

How to find your actual deductibles

Get your declarations page. The summary sheet. Look for your “all other perils” or “AOP” deductible. Then look for any separate deductibles for wind, hail, hurricanes, earthquakes. Check whether each is flat dollar amount or percentage.

If you see percentages, do the math. Multiply by your dwelling coverage. That’s what you’d actually pay.

If you can’t figure it out call your insurance company and make them explain every deductible. Make them spell it out.

Deductible affects premium

Higher deductible = lower premium. According to Insurance Information Institute going from $500 to $1,000 deductible can cut premium by 25%. Going to $2,500 might save 35% or more.

But don’t pick a deductible you can’t actually afford. If $5,000 would wreck you, don’t pick it to save $200 a year. When tree falls on roof you need to pay that deductible to start repairs.

Have your deductible amount in savings. If you have $2,500 all-perils and $7,500 wind deductible, you should have at least $7,500 accessible.

What Marcus did

After the shock wore off he got quotes from other insurers for flat deductibles. Some wouldn’t offer it—percentage was standard in his area. But he found one company with $5,000 flat instead of 2%. Still a lot but predictable.

He also started saving specifically for deductible. Figured out worst case scenario and built toward that number.

Know your deductibles. All of them. Do the math on percentages. Keep deductible in savings. Consider whether to file small claims—if deductible is $2,500 and damage is $3,000, you’re only getting $500 from insurance and putting a claim on your record.

Liability just wandered into my office—she likes sitting on my feet when it’s cold—but the point is your deductible might not be what you think. Check your policy. Don’t be Marcus finding out at the worst possible moment.