A renters insurance deductible is the amount a renter pays toward an insurance claim.
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A renters insurance deductible is the portion you pay on a claim. It’s deducted from your payout.
The standard renters insurance deductible is $500 to $1,000.
Your deductible may vary for standard renters insurance versus flood and earthquake insurance.
See Insider’s guide to the best renters insurance companies.
Renters insurance protects your belongings and offers liability coverage for injuries that happen on your property.
Damage to your personal property must be caused by an insurance peril, like theft, fire, or a storm. If your belongings are damaged from an insurance peril, you’ll need to pay a deductible every time you claim a loss.
What is a renters insurance deductible?
A deductible is the amount the insured must contribute towards a loss claim. The deductible is subtracted or deducted from your claim payout.
Your deductible can be a dollar amount or a percentage. The Insurance Information Institute notes that the standard renters deductible is typically between $500 and $1,000. The declarations page of your insurance policy will state your deductible amount and whether it is a percentage or dollar amount.
Your deductible applies every time you file a claim and only to personal property damage, not personal liability coverage.
How deductibles work
If you have a dollar amount for your deductible, this would be deducted from your claim. For example, let’s say your apartment has water damage from a storm and the insurance company calculates your loss at $5,000. If your deductible is $500, the insurance company will pay you $4,500.
If your deductible is a percentage (more typical for homeowners insurance policies), this amount would be deducted from your claim. If your belongings are insured for $50,000 with a 2% deductible, you would have $1,000 deducted from each claim. For example, if you have a $5,000 loss, the insurance company would deduct $1,000 from your loss and pay you $4,000.
A larger deductible can decrease your annual premium
The average cost of renters insurance is around $15 a month, or $180 yearly. One way to reduce your premium is to increase your deductible amount.
Having a deductible higher than $1,000 reduces your annual premium. However, if you …read more
Source:: Business Insider