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Home Insurance Deductibles - A Texas Guide |
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Home Insurance deductible levels in Texas vary widely from company to company and even from policy to policy within a company. A home owner who asks for "the lowest price" on a home insurance policy without paying attention to the deductible level on the policy may wake up to find that they have a 5% deductible level and a home insurance policy that only pays off on total losses. Even worse, the high deductible means you would have to have many thousands of dollars set aside for your part of any repairs. The home owner is responsible for the first $10,000 in damages on a $200,000 house. On a $400,000 house, you would have to come up with the first $20,000 dollars toward the repair of any damage. |
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If your goal regarding home insurance is to just have enough to partially assist you in case of total loss, then a 5% deductible may be just perfect for you. Just be sure to have that nestegg of $10,000, $20,000 or more on hand to cover your deductible. |
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Most people want insurance policies that are more helpful when it comes to damage that is less than total destruction of their home. That includes things like roof damage or theft or fire losses that result in something less that a total loss. If this sounds like the kind of insurance support you expect, then we need to spend a few minutes dealing with deductible levels. |
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A couple of decades ago, deductibles were defined in specific dollar amounts like $250, $500 or $1,000. In recent years, insurance companies have switched to offering deductible levels defined in percentages such as 1% or 2% of the insured value of the home. This change to deductibles defined as percentages has lessened the amount of payment that insurance companies will pay. It also means that home owners need to be able to pay for lesser home damages and for a larger share of big damages. |
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In most of Texas, a 1% deductible has become that standard deductible for most 'good' policies.. You can certainly get higher deductible and you may find a few with lower levels but 1% is the most common offering. In some coastal counties like Houston's Harris county, the best deductible may be 2%. This has become more common as the insurance companies work to limit their losses in case of windstorm or hurricanes. |
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The deductible that you choose is up to you. You should consider what you want your insurance to really cover and how much cash you want to maintain to cover your portion of any loss. If you have a mortgage, the lender will likely require that you have a home insurance policy and they will promote a very low deductible. |
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