Home insurance deductible: how does it work?

Q: Home insurance deductible: how does it work?

The deductible is the part of a covered loss that you pay. The insurer subtracts it from your claim check. Most deductibles are a dollar amount, often $500 or $1,000 at minimum. Some are a percentage of your home's insured value, especially for hurricanes, named storms, wind and hail, or earthquakes. These can be far higher than you expect. Deductibles generally don't apply to liability claims. They are listed on your declarations page, and state rules govern how they work.

Two minutes with your declarations page now can save you a nasty surprise after a storm.

The answer in 2 lines. The deductible is the part of a covered loss that you pay. The insurer subtracts it from your claim check. Most deductibles are a dollar amount, often $500 or $1,000 at minimum. Some are a percentage of your home's insured value, especially for hurricanes, named storms, wind and hail, or earthquakes. These can be far higher than you expect. Deductibles generally don't apply to liability claims. They are listed on your declarations page, and state rules govern how they work.

The 3 steps

Open your declarations page and find every deductible: the standard one ("all other perils") and any separate deductible for hurricanes, named storms, wind and hail, or earthquakes.
Turn each percentage into dollars: multiply it by your dwelling coverage limit. That's what you'd pay before the insurer pays anything.
If a claim payment looks too low, ask the insurer in writing for the breakdown: damage amount, depreciation, deductible, limits.

The main types of deductibles

Type	How it works	Example
Dollar deductible	A fixed amount subtracted from each claim	$10,000 covered loss, $500 deductible: you receive $9,500
Percentage deductible	A percentage of the home's insured value, whatever the size of the damage	2% on a home insured for $100,000 = $2,000 subtracted
Hurricane / named storm	Applies only when a storm meets the policy's trigger, often one named by the National Weather Service or National Hurricane Center	5% on a $300,000 home = $15,000 out of pocket
Wind and hail	Works like a hurricane deductible; usually 1% to 5%	More common in the Midwest and Tornado Alley states
Earthquake	A percentage of the home's replacement value, from 2% to 20% depending on where you live	Earthquake coverage is usually separate from a standard policy

The examples come from the NAIC and the Insurance Information Institute. Only the amounts in your own policy count.

How your claim payment is calculated

In general, the insurer starts from the cost of the covered damage. If your policy pays actual cash value rather than replacement cost, it subtracts depreciation. Then it subtracts your deductible, and it never pays more than the limit for that coverage. Your policy wording sets the details.

What not to do

Picking the cheapest policy without checking for a percentage storm deductible.
Filing a claim for damage smaller than your deductible. The insurer won't pay anything, and the claim may still go on your record.
Choosing a high deductible to lower your premium when you couldn't pay it after a loss.
Signing a settlement with someone who caused the damage without telling your insurer. It can block the insurer from recovering your deductible.

Hurricane and named storm deductibles

According to the NAIC (June 2025), 19 states and the District of Columbia have some form of hurricane or named storm deductible, including Florida, Texas, New York and Louisiana. Other states may allow them.
These deductibles are usually a percentage of the home's insured value. The NAIC reports ranges from 1% to as high as 15%.
What triggers them depends on your state and your insurer, and state law often limits the triggers. In most states, the deductible applies to each claim. In Florida and Louisiana, a hurricane deductible applies once per season, not once per storm.
Have a question about your state's rules? Find your state insurance department on the NAIC Insurance Departments page: pick your state from the menu to get its contact details or file a complaint.

Good to know

A higher deductible generally means a lower premium. Choose an amount you could pay tomorrow from savings.
If someone else caused the damage, your insurer may try to recover its payment from them (subrogation). Ask whether your deductible is included in that recovery.
Flood damage from rising water isn't covered by a standard homeowners policy and needs separate flood insurance, with its own deductibles.
Renters insurance has a deductible too. See our guide on whether renters need renters insurance.

In Mobile, Alabama, Keisha's home is insured for $250,000. Her policy has a $1,000 standard deductible and a 2% named storm deductible. After a tropical storm damages her roof, she reads her declarations page: 2% of $250,000 is $5,000, so a $12,000 repair would bring her a check for $7,000. She now keeps an emergency fund sized to that number and asks her agent what a lower storm deductible would cost.

A made-up story, for illustration.

Bobby

Sources, verification, confidence

Verified on November 6, 2026, for the United States. Confidence: high for how deductibles work and for the NAIC's figures on storm deductibles; medium for typical ranges, which vary by insurer and by state. The amounts in the examples are illustrations. Your policy sets your coverages, deductibles and limits. Bobby doesn't recommend any insurer or policy.