Homeowners insurance covers any damage your home sustains from a fire or severe storm, but you'll likely be responsible for a portion of the costs. Each policy includes a deductible, which is how much you'll be expected to pay before the coverage kicks in. If you're shopping for home insurance, understanding how deductibles work will help you make the right choice. Here's what you need to know.

How Do Deductibles Work?

If you need to file a homeowners insurance claim, your carrier will pay for repairs and replacements, minus the deductible amount. For instance, if you have a $500 deductible and a severe storm causes $800 in damage to your siding, insurance will only cover $300 of the repair costs. However, you must pay your portion before the carrier provides the remaining funds.

homeowners insurance

Your insurer also won’t cover damage that’s less than the policy’s deductible. If a broken window costs $300 to repair and your plan has a $500 deductible, you’ll be expected to cover the entire amount yourself.

Do Deductibles Affect Premiums?

Higher deductibles reduce the risk that an insurance company will have to pay for minor damage or lost property. A carrier often compensates by offering lower premiums to high-deductible policyholders. Depending on the insurer, choosing a $1,000 deductible instead of $500 could lower your coverage costs by hundreds of dollars per year, making monthly payments smaller and more manageable.

How Do You Choose a Deductible?

If you could pay a $1,000 repair bill without too much financial stress, a policy with a high deductible is usually the better option. Over the course of the plan, this could save you thousands of dollars, which you can put toward improving and customizing your house when issues arise.

However, if you would have trouble coming up with the repair expenses on short notice, a lower deductible is usually the better choice. Despite the higher monthly premiums, you’ll get peace of mind knowing that damage to your home will be covered after a disaster.


Since 1889, Farmers Mutual Insurance Association of Osceola County has been helping individuals across northwest Iowa protect what matters most. As a mutual company, they’re completely owned by their policyholders, so you can be confident they’ll do what’s right for you. Whether you need farm, property, dwelling, or mobile home insurance, their team can help you find a plan that fits your budget and lifestyle. Visit the website for more on their homeowners insurance services, and call (712) 754-3654 to request a free quote.