Understanding the role  your Dallas home insurance deductibles play in a homeowners insurance policy is an important part of getting the most out of your policy.

The  deductible is the amount you will pay out of pocket in the event of a claim before the insurance policy begins to pay out.

Depended upon the type of policy, your deductible can be a specific dollar amount or a percentage.  This is predetermined by you, your agent, and the availability. Generally speaking, the larger the deductible, the less you pay in premiums for an insurance policy.

Your home insurance deductible represents a sharing of the risk between you (the policyholder) and the insurance company.

Because places like Dallas and Houston are considered catastrophe prone areas, homeowners insurance deductibles are generally higher than other parts of the country.  As a result, Dallas homeowners, generally see a wind and hail deductibles of 1%.  While Houston area hurricane deductibles can be as high as 5%.  In other words, if you own a $100,000 home with a 5% deductible, you (the policyholder) would be responsible for the first $5000 damage as a result of a hurricane.

Here are some important things to know about deductibles (Courtesy of the Insurance Information Institute):

Raising a Deductible Can Save Money

One of the best ways to save money on a home or auto insurance policy is to raise the policy’s deductible. For example, for auto insurance, increasing the dollar deductible from $200 to $500 can reduce collision and comprehensive coverage premium costs by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. But, before choosing a higher deductible, be sure you have enough money set aside to pay the deductible outright if you have a claim.

Deductibles Differ by Company and by State

Insurance is state regulated. And insurance companies must follow strict state laws. This also applies to the way deductibles are incorporated into the language of a policy, and how they are implemented. In many states a range of deductibles can be found. So if you are shopping for insurance, you should always ask about deductibles when comparing policies. For homeowners or renters insurance policies, most insurers offer a minimum $500 dollar deductible. However, raising a deductible to $1,000 or more can save upwards of 20 percent on the cost of an insurance policy.

Deductibles Do not Apply to Liability Claims

There are generally no deductibles for the liability portion of a homeowners or auto insurance policy. Instead, the deductibles apply to property damage. So, on in auto policy, there is a deductible for the optional comprehensive or collision coverage, but not for the liability portion. And, in a homeowners policy, deductibles apply to damage to the structure of the house or personal possessions but not if a homeowner is sued or a medical claim is made by someone injured in the home.

Consider Percentage Deductibles When Purchasing a Home

When looking for a new home, it is important to consider the cost of insurance.  Dallas Home insurance policy rates can vary by 200% or more.  At the same time, some companies now require carrying 2% deductible.  Remember, you will be paying for insurance the entire time you live in your home—if you are a prospective buyer and feel you cannot afford the insurance, then it may be time to consider a different home.

Source:  Insurance Information Institute