How Insurance Deductibles Work on Your Central New York Policy

When you read through your insurance policy, the deductible section can seem complex and unclear. For Central New York residents who want to understand their out-of-pocket costs, this lack of clarity can make it difficult to choose coverage that fits your budget and situation.

At the Horan insurance agency, we work with multiple carriers and assist local residents in understanding their insurance costs. As an independent agency serving Central New York, we share information about how deductibles work while exploring options for your coverage costs.

In this article, we'll explore how different types of deductibles affect your insurance costs, when multiple deductibles might apply, and steps you can take to select deductible amounts that make sense for your situation.

What You Should Know About Insurance Policy Deductibles in Central New York

Most homeowners insurance policies use a flat dollar amount deductible. For example, with a $1,000 deductible on your policy, you'll pay the first $1,000 of a covered loss before your insurance coverage begins to pay.

If you experience a $5,000 covered loss:

• You pay: $1,000 (your deductible)
• Insurance pays: $4,000 (remaining amount)

How Special Coverage Deductibles Work on Your Policy

Your policy may include separate deductibles for certain types of coverage:

• Electronics coverage might have a lower $100 deductible
• Sewer and water backup could have a $500 deductible while your main policy has $1,000
• Scheduled jewelry or personal articles may have no deductible or a small $50-150 deductible

During a major loss like a fire that affects multiple types of property, if the main policy deductible applies, you'll typically only pay that single deductible—it covers all losses including specially scheduled items.

However, if you experience a loss that only affects items with a special deductible, such as scheduled jewelry, that specific deductible applies and you cannot use the main policy deductible to offset it.

Consider this scenario: If someone breaks into your home and steals only scheduled jewelry with its own $500 deductible, you'll pay that amount rather than your main policy's $1,000 deductible. But if they damage your door during the break-in, the damage claim falls under your main policy deductible.

Understanding How Property Insurance Deductibles Differ From Health Insurance

Unlike health insurance, where you work toward meeting an annual deductible, property insurance deductibles reset with each claim. This fundamental difference affects both auto and home insurance policies.

For example, if you have a $500 collision deductible on your auto policy:

• First accident: You pay $500, insurance covers remaining damage
• Second accident three days later: Another $500 deductible applies
• Third incident six weeks later: Yet another $500 deductible

This same principle applies to homeowners insurance—each new claim requires paying the deductible again, regardless of how many claims you've had that year. However, some auto policies offer glass coverage without a deductible, which can help with windshield repairs common in Central New York winters.

Learn more about how glass claims affect your auto insurance policy.

Why Percentage-Based Home Insurance Deductibles Need Special Attention

While most policies use flat dollar amounts, some carriers calculate deductibles as a percentage of your dwelling coverage. For example, a 0.5% deductible on a $500,000 home means you'll pay $2,500 out of pocket before insurance coverage begins. A 1% deductible would mean paying $5,000 out of pocket.

A key consideration with percentage deductibles: Your deductible amount increases automatically each year as your dwelling coverage rises with inflation.

For instance, if your dwelling coverage increases by $10,000 due to inflation guard coverage, a 0.5% deductible would increase by $50. Over several years, these increases can significantly affect your out-of-pocket costs. A flat dollar amount deductible can provide more predictable costs since it remains constant unless you choose to change it.

Select Insurance Deductibles That Work for Your Budget

Choosing deductible amounts without fully understanding how they work can lead to unexpected costs when you file a claim. You might find yourself paying more out of pocket than anticipated, or dealing with multiple deductibles you didn't know applied to your policy.

As a Central New York insurance agency, we share information about these deductible options while looking for coverage that better aligns with your situation. We maintain relationships with multiple carriers, allowing us to explain different deductible structures and how they might affect your costs.

Click the Get a Quote button below to learn about insurance options from an agency familiar with both industry practices and local Central New York considerations.

Also learn how auto insurance deductibles work in New York State.