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What is your homeowner's insurance deductible? Any recommended endorsements/riders?

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  • What is your homeowner's insurance deductible? Any recommended endorsements/riders?

    I am in the process of buying our first home and looking at homeowner's insurance for the first time. Previously we've only been renters. I am in the process of evaluating the various policies and trying to evaluate costs as well as actual coverages.
    -What does everyone have for their deductible? I know most on this blog only use insurance to cover major events and self-insure for smaller damages and I'm of that mindset as well (financial house in order). However, I was wondering what this actually translates into for everyone in terms of deductibles. 1k, 2k, 5k, 10k?
    -Are there any specific endorsements/riders and dollar amounts that you would recommend. The PDF of the actual policy is 50+ pages and from what I've heard, everything looks good until you have a claim and find out one specific item isn't actually covered. As such, are there specific items you recommend being covered for and what dollar amount for those items should I be looking for.

    Thank you.

  • #2
    Jewelry, cash, flood, earthquake, replacement value, as applicable. I think my deductible was $3k? After reading about this guy's experience in the Tubbs fire I've started a new email address where I forward the receipts for all purchases over $50 just in case.


    • #3
      Shop around, premiums can vary considerably but make sure you get a quality company when insuring big ticket items. Experts recommend replacement cost over cash value policies to reimbursed full value of replacement even if those costs go up rather than on a depreciated value of the property. 10-15% more expensive but worth it. If using an agent, go with a recommended or highly rated independent agent rather than a captive agent. Also keep in mind I don't believe they have a fiduciary standard. Ask about opportunities to save - monitored alarm system, storm rated windows, gated community, etc. Swimming pools, slides, pets, a history of claims are some thing that can adversely affect your rates.

      Value of insured property is just the property needing insurance, not the land. Also if there is something detached you will also need a rider if you want to have it covered, such as a detached garage - don't automatically assume everything on the property is covered - the insurer usually assumes otherwise unless specified to minimize payouts.

      Depending on where you live. In California, optimize protection for fires, earthquakes. In Florida, hurricanes and lightning strikes. Kansas, tornadoes Dorothy. Large cities - riots and terrorism? Sinkhole rider in high sinkhole area. Burglaries common, make sure it's covered.

      Consider including an umbrella policy, usually inexpensive and important for physicians. Where available, bundling homeowner's and auto can get you significant discounts.

      Take pictures of the home exterior and all interior rooms as well as all personal property being insured, and keep this off site or in the cloud.

      Also depends on the difference in premiums you pay for the different deductibles. A small spread in premium may be worth lower deductibles, a large spread may not since you're focused on rare large events. Do not make a claim against small damages. The insurer will drop you like a hot potato.


      • #4
        We've got a $5k deductible. Make sure everything is replacement value and not actual cash value. The other riders such as earthquake, flood, etc. will vary based on location or if you even need them. Shop around every few years. We just lowered ours by almost 30% by shopping around.


        • #5
          Last year I increased mine to 10K. It was 2 K and it cut the cost almost in half. It is something I hope to never use and most of the stuff that happens to my house are small. We had a major hornet infestation that ended up costing us 1500 all said and done. And we were hit by lightning I guess and blew out a few sockets and fried a TV and the garage door opener. Also cost between 1-2 K. Insurance did not help with any of these issues. But if the house burns down or a tree crashes into my living room I would rather not be on the hook for 25-425K in repairs/ replacement.


          • #6
            $15K deductible


            • #7
              Deductible: However, I was wondering what this actually translates into for everyone in terms of deductibles. 1k, 2k, 5k, 10k?
              Stay to the high end. 5-10k is common. You will find your claims history follows you.
              In the coverage, read any exclusions limitations.
              Those are the ones you may need a rider depending on your location, like flood or “named storm”.
              You want an HO-3 or HO-5 policy.


              • #8
                I have a deductible that is 2% of the value of the house.

                I learned a long time ago, you want you deductible high enough to dissuade you from making a modest claim. That claim stalked me for many many years through multiple insurance companies with increased premiums


                • #9
                  Thee replies here have been eye opening for me. I have been carrying a $1K deductible for years without really giving it much thought. I’m definitely going to price out higher deductibles since we carry an emergency fund more than sufficient to cover modest expenses.


                  • #10
                    Hrmm, Geico only allows 5k to be the max.


                    • #11
                      Have a 1K deductible. With respect to Umbrella policy, there was a requirement under my Auto policy to have certain deductibles. Unsure if something similar applies to a home-owner's policy. Our home was damaged by hail of our roof earlier this year (full replacement is needed). I have observed neighbors whom have damage, though between the deductible and the adjuster's lowball damage assessment, it is uneconomical to make a claim for something that is/will be IMO a major issue. At least 20 homes in our subdivision have had their roofs entirely replaced (total of c.a. 100 home in our subdivision).


                      • #12
                        We actually got fired from our homeowners insurance for 4 claims in 5 years. Major hailstorm with new roof/gutters/windows, raccoon ate hole in roof with water damage, frozen pipe burst flooding our basement, another hailstorm that we called insurance about but did not have damage (this counted as a claim). Our new insurance will nearly double. With the new insurance, going from 1k to 2500 deductible only saved about 7 percent in premiums and did not seem worth it. Did not inquire about higher deductibles.

                        I am sure that the insurance companies have data saying that we are likely to have more claims in the next five years. But the more likely scenario is we don't have them for the next 5 years and the new insurance company just gets our premiums.