Florida Home Insurance Deductibles Explained

December 22, 2024

Today we hope to provide an understanding of the various Florida home insurance deductibles.

Why is it important to understand Florida home insurance deductibles?

Insurance can be confusing and easy to just sign up for without understanding your coverage. This often turns into frustrating situations when it’s time to file a claim. Understanding the various deductibles on your insurance policy can help prevent future frustration.

1. What Is a Home Insurance Deductible?

The amount a policyholder pays out-of-pocket before insurance covers the remaining costs.

How Florida home insurance deductibles impact premiums (higher deductible = lower premium and vice versa). This is important in Florida since home insurance premiums are out of control. If you can afford to pay a larger deductible, it will lower you home insurance premium.

2. Types of Deductibles in Florida Home Insurance Policies

Standard Florida Home Insurance Deductibles

Fixed dollar amount or percentage.

Example: If you have a $1,500 deductible, you are responsible for paying the first $1,500 of a claim before the insurance company will start paying. This applies to the standard covered losses on your policy unless otherwise specified.

Hurricane Deductibles

Specific to Florida and other hurricane-prone areas.

In theory, this separate deductible for hurricanes allows you to get your home insurance premium down by increasing the amount of money you pay out of pocket for hurricane damage. Having a high deductible puts more financial responsibility on the insured. This also keeps customers from filing claims on smaller losses.

Hurricane deductibles are percentage-based (often 2–5% of the insured value of the home’s insurance coverage. That does not mean it is 2-5% of the loss. It means your deductible is based on a percentage of your Coverage A. If your home is insured at a replacement cost of $500,000 and you have a 2% deductible, then your hurricane deductible would be ($500,000 x .02) $10,000! That would come as quite a shock if you were expecting your deductible to be a percentage of your claim.

When it applies: Triggered by named storms as defined by insurers. Read more about when hurricane deductibles are triggered in Florida.

Windstorm or Hail Deductibles

These are separate from hurricane deductibles in some cases. However, the math works the same way. You can also push down your premiums by designating a windstorm or hail deductible as a percentage.

This deductible would be in effect in the event of windstorm or hail damage that occurs independent of a hurricane.

3. Florida Home Insurance Deductible Calculator

Use the calculator below to quickly see how much your home insurance percentage deductible is.

Florida Home Insurance Deductible Calculator

Percentage Deductible Calculator

Florida Home Insurance Deductibles: Per-Claim vs. Per-Annum

1. Per-Claim Deductibles

Definition: A per-claim deductible applies every time you file a separate insurance claim.
How It Works:
- Each covered event requires you to pay the deductible amount before the insurance coverage kicks in.
- If you have multiple claims during the same policy period, the deductible resets for each claim.
Example:
- You have a $1,000 deductible, and your home sustains damage from a fire. You pay $1,000, and your insurer covers the rest.
- Later in the same year, a flood damages your home, and you must pay the deductible again before coverage applies.
Common Uses: Most standard home insurance policies use per-claim deductibles for general damages like fire, theft, or vandalism.

2. Per-Annum Deductibles

Definition: A per-annum (or annual) deductible is a cumulative deductible applied over the entire policy year.
How It Works:
- The deductible is calculated across all claims made within the year. Once the deductible amount is met, the insurance covers the rest for additional claims that year.
- You do not have to pay the deductible again after it is met for subsequent claims within the policy term.
Example:
- You have a $2,000 annual deductible. A hurricane causes $3,000 in damages, so you pay $2,000, and the insurer covers $1,000.
- Later that year, another storm causes $5,000 in damage. Since the deductible has already been satisfied, the insurer pays the full $5,000.
Common Uses: This structure is more common for hurricane or disaster coverage. In Florida, hurricane deductibles are on a per-annum basis. You have one hurricane deductible per year. So if you pay your deductible in a loss during a hurricane and then suffer damage in another hurricane later in the year, you won't have to pay a deductible in the second loss.

Florida Home Insurance Deductibles: Key Differences

Aspect	Per-Claim Deductible	Per-Annum Deductible
Application	Applies to each individual claim separately.	Applies across all claims during the policy year.
Costs for Multiple Claims	Deductible must be paid for every claim.	Only paid until the annual deductible is met.
Best For	General risks with infrequent claims.	Disaster-prone areas with higher claim frequency.

Understanding the difference between these types is vital in states like Florida, where hurricane and windstorm events can lead to multiple claims in a short time. Choosing the right Florida home insurance deductible type based on your risk profile can save you significant money in the long run.

5. Tips for Choosing the Right Deductible

It is important to get quotes on varying deductibles in Florida. You will have to balance out risk of a high deductible and an affordable premium. Make sure you don't put yourself into a situation where you can't afford your deductible in during a claim.

If you need help with your Florida home insurance deductibles or would like to compare quotes, contact Seth at Carter Family Insurance today!

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Florida Home Insurance Deductibles Explained