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    When Do You Pay The Deductible For Homeowners Insurance?

    Posted by Ron Wadley on May 9, 2019 1:39:53 PM

    As Texas rolls into the spring storm season, Texans have begun to see some big storms and more are expected as we move through this time of year. It doesn't matter if you live in Amarillo, Ft Worth, or Austin, hail is coming to a neighborhood near you. As a result of these hail storms, there are a lot of questions rolling into Insurance For Texans' office about hail claims on Texas homeowners insurance policies. One of the common questions has to do with the mechanics of the claim process itself after a home insurance covered claim is approved by the insurance company. Different companies operate slightly differently, but there are certainly some general expectations in that process with respect to homeowners insurance deductibles. Waco homeowners specifically want to know about when and how a policy  deductible gets paid.
    When Do You Pay The Deductible For Homeowners Insurance

    Homeowners Insurance Deductible Defined

    When you signed up for your Texas home insurance policy, there was a provision in the policy contract that outlined how much of the repair costs or replacement costs that the insurance company would pay and how much of those costs would be an out of pocket expense for you. That portion that is your responsibility to pay out of pocket is called the Deductible. It is in all types of homeowners insurance that are sold in the state of Texas, and is typically broken down into different amounts depending upon the type of insurance claims made rather than being a policy deductible.

    Wind/Hail storms or Hurricanes have percentage-based deductibles as a standard. Every insurance claim that is not storm related is typically called an "All Other Peril" deductible and can either be a flat deductible (flat dollar amount) or a percentage-based deductible (percentage of your dwelling coverage) depending upon the definitions of your policy. All deductibles typically have a minimum deductible amount that is dependent upon your location and the type of homeowners insurance deductible that is applicable to your claim scenario. Hurricane deductibles may appear on your policy even if you do not live close to the coast since the same policy can serve the people of Lubbock just as well as it does the people of Corpus Christi. Though the hurricane deductible amount will have a much bigger effect on the homeowners insurance premiums on the Corpus Christi policy.

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    Do I Actually Have To Pay My Homeowners Deductible?

    Most folks start with the question of do I really have to pay my deductible on my homeowners insurance claim? Yes, you are legally required to pay your deductible on any claim that is made against your policy whether it be for hail damage, hurricane damage, or water damage from a busted pipe. Part of the reason that companies keep escalating the standard deductibles is because roofers have been waiving them for years telling Texans that it's all a scam. For a roofer to make money to feed their family, and magically waive thousands of dollars in hail deductibles they have to escalate the value of the claim payment that is made to the homeowners. This has a profound effect on your insurance rates as inflated claim payments over a period of time will mean that rates for average homeowners insurance policies will be raised significantly.

    With enough natural disasters happening in Texas, the homeowners policies will either end up costing Texans more money for the same coverage, the companies will reduce the insurance coverages offered, or the hail deductibles specifically will be increased. Any of those three will increase the out of pocket costs for the fine folks of Midland-Odessa. Our guess is that in the more hail prone areas like North Texas, the insurance companies will eventually determine a disaster deductible amount high enough that the roofers can not overcome without charging you money and them still remain profitable. Something has to give, so it is just a matter of time as the costs of damage continue to skyrocket which in turn cause the homeowners policies to skyrocket as well.

    Home Insurance Renewal Blow Mind

    How Do I Pay It?

    Typically, the contractor is responsible to collect the deductible amount from you as part of the reimbursement for the repair costs of damage. With many home insurance companies, assuming that you have a replacement cost policy on the roof, will release an amount of money equal to the depreciated value of the roof and other structures affected by the claim event less the deductible owed. This money should be used to make a down payment to the contractor to initiate the work to be completed on the home, with the final settlement payment coming from the carrier once the work on your home is completed and satisfactory. The homeowners insurance company will want proof of that completed work to release those funds for final settlement. If for some reason you don't actually replace the roof, the funds will not be released to you on average homeowners insurance.

    When Do I Pay It?

    Working from the assumption that the home insurance company pays a depreciated amount up front and the remainder once work is completed, the final settlement is when the deductible will be due. The final settlement phase is when the funds are released to you. To complete payment to the contractor for the work provided, you would need to pay the deductible in addition to those settlement funds.

    Get TRUE Texas Home Insurance

    If you aren't sure whether or not you have a 1% deductible or a 3% deductible on your home policy, or even whether it is replacement cost or actual cash value, you should speak to an independent insurance agent at Insurance For Texans today. We have the tools and are insurance experts that make sure your home and it's policy match up to what you expect them to do for you if disaster strikes!

     

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    Topics: windstorms, deductible, North Texas, Dallas/Fort Worth, hail, Burleson, homeowners insurance, TRUE Texas Home Insurance, Amarillo, Austin, Waco, lubbock