Deductible
What is an insurance deductible?
The amount the homeowner is responsible for paying out of pocket before the insurance coverage kicks in on a claim.
Definition
The deductible is the homeowner’s share of the claim. If a roof claim is $18,000 and the deductible is $2,000, the carrier’s checks total $16,000 and the homeowner covers the remaining $2,000.
On storm policies, deductibles are often a percentage of the home’s insured value rather than a flat dollar amount, which can make them larger than people expect. The deductible is always shown on the scope of loss.
It’s important to be straight with homeowners about the deductible. Promising to “eat the deductible” or rebate it is illegal insurance fraud in most states — the homeowner is legally responsible for paying it.
Related terms
ACV vs. RCVACV is the depreciated cash value of your roof today; RCV is what it costs to replace it new — and the gap between them is the depreciation you have to earn back.Scope of lossThe carrier’s itemized estimate of the damage and what they’ll pay to repair it — the document every claim is built on.Recoverable depreciationThe portion of the claim the carrier holds back at first and releases once the roof is replaced and documented.Mortgage check endorsementWhen a claim check is made out to both the homeowner and their mortgage company, requiring the lender’s sign-off before funds release.