Property claims glossary
What is a deductible on a property claim?
A deductible is the part of a covered loss the insured bears before the policy pays, set either as a flat dollar amount or as a percentage of the dwelling limit. It is subtracted on every claim, so applying the wrong one changes the check directly.
Worked example · fictitious claim
A family has a $1,500 all-perils deductible and a $14,000 covered water loss. The payment before depreciation is $14,000 − $1,500 = $12,500. Had the loss been $1,200, it would fall under the deductible and nothing would be paid.
How it affects a settlement
The deductible is usually taken once per occurrence, and many policies apply a separate one to wind, hail or hurricane losses. Using the wrong deductible, or taking it twice, leads to an overpayment or an underpayment.
In practice
The amount the policyholder bears before coverage responds. Property policies increasingly carry separate, percentage-based deductibles for wind/hail or hurricane (calculated on the dwelling limit, not the loss), which is a frequent source of settlement arithmetic errors.
Related
Wind/hail deductible · Statement of loss · AI property claims review · property claims glossary