In recognition of this reality, today’s post, the first in a series, will examine the meaning of the term “deductible,” which has a greater legal significance than most people might imagine.

What Exactly Is a Deductible?

A deductible is more than just the amount of money that a person must pay if they file a claim under their homeowners insurance or their car insurance. It actually represents an allocation of risk between you, the policyholder, and the insurance company. In other words, it’s your share of the loss endured deducted from the value of the claim submitted.

How Are Deductibles Paid?

Deductibles are not always paid as a designated dollar amount. Indeed, they can also be paid as a percentage of the total amount of insurance coverage.

By way of example, consider a policyholder whose car insurance has a $500 deductible and who gets into a wreck that causes what the insurer ultimately determines to be $15,000 in damage to the car. Here, the insurer would either first want a $500 payment before issuing a claims check for $15,000, or would simply issue a claims check for $14,500.

Conversely, consider a policyholder whose homeowners’ insurance deductible is 2 percent and whose $100,000 home suffers a $20,000 loss. Here, the insurer would either first want a $2,000 payment before issuing a claims check for $20,000, or would simply issue a claims check for $18,000.        

How Often Must Deductibles Paid?

This depends largely upon the type of insurance. Health insurance, for example, has a single annual deductible, meaning the amount only has to be paid one time during the 12-month period. Car insurance and homeowners’ insurance, on the other hand, generally require payment of a deductible for every claim submitted.

It’s worth noting that here in Florida, hurricane-related deductibles, which are typically percentage-based and relatively high, are generally paid per season as opposed to per weather event.

Has Your Home Insurance Company Denied Or Undervalued Your Property Damage Claim In Florida?

If your insurance company is dragging their feet regarding your property damage claim you should speak with an experienced insurance claim lawyer as soon as possible. Please contact us online or call our Florida law office directly at 800.451.6786 to schedule your free consultation. We help Florida residents just like you fight the big insurance companies who fail to abide by their own policies. Remember, we work on a contingent basis, meaning you don't pay us anything until we win your case. 

K.C. Williams III
Managing Partner who has spent his entire career representing Florida insurance and personal injury claims.