Most homeowners are aware that they must pay a deductible before their homeowner insurance pays for a claim. What many people do not know is there is more than one kind of deductible when it comes to homeowners insurance. The most commonly used deductible is an All Other Peril (AOP) deductible.
An All Other Peril deductible is the standard deductible that the insurance company requires the homeowner to pay before paying the rest of a claim. This deductible is often selected by the policyholder and is a flat rate.
The AOP deductible is the most commonly used deductible when it comes to approved insurance claims. Although it is most common, there are other deductibles to be aware of. Keep reading to learn more about AOP deductibles as well as other types of deductibles your homeowner’s insurance may require you to pay.
- All Other Perils deductible is the same as a standard deductible.
- The AOP is selected by the policyholder when they buy homeowners insurance.
- There are exclusions when it comes to covered perils for homeowners insurance.
- There are other deductibles that may be triggered depending on the type of covered peril that occurs.
What perils are covered by homeowners Insurance?
Homeowners insurance has a large list of perils that it will generally cover. Each insurance company is different and has different exclusions. In general, though, the following perils are typically covered under most policies:
- Accidental cracking and tearing
- Accidental water discharge
- Artificially generated currents
- Frozen HVAC or appliances
- Damage from aircraft and vehicles
- Explosion
- Falling objects
- Hail and windstorms
- Lightning and fire
- Riots and vandalism
- Smoke
- Theft
- Volcanic eruptions
- Weight from snow, sleet, and ice
- Hurricanes
While no one wishes any of these incidents to occur to them, they are likely and are covered under homeowners insurance. If one of these events were to occur, the homeowner would be responsible for paying their standard deductible, and the insurance company would pay for the rest of the damage assessed in the claim.
If the damage is due to a peril that is not listed above, it may require a special endorsement and a different type of deductible in the long run.
All other perils vs all perils
It is easy to get confused between an All Other Perils deductible and an All Perils policy. These two terms have very distinct meanings when it comes to insurance. Confusing the two can result in the detriment of a claim.
All other perils
This term is considered the standard deductible for an insurance policy. It is the flat rate that a policyholder chooses to pay when purchasing a policy. This deductible must be met before the insurance company will take over and finish covering a claim.
All perils
All Perils, on the other hand, is a type of insurance policy. This policy is also commonly known as an open peril policy or an all-risk policy. This type of insurance covers all perils except for the list of exclusions located in your policy. This differs because most policies list specific perils they will cover instead of including them all with minimal exceptions.
While both of the phrases are similar, they are very different, It is important to understand the difference between each so that a policyholder does not select an AOP, thinking it is actually an all-perils policy and vice versa.
Other types of deductibles in home insurance
Now that you understand the core concepts of an AOP deductible, it is time to learn about other deductibles you may come across with your home insurance, depending on your geographic location. The following are common examples of deductibles that also exist:
- Earthquakes. This deductible may occur if you live in a state that is at a higher risk of suffering from an earthquake. These states may include Nevada, California, Washington, and Utah.
- Floods. For those who live in a flood zone or near a body of water that could flood, you will likely have a flood deductible. This is either a flat amount or a percentage depending on the policy you purchase.
- Hurricanes. When a hurricane is given a name and is upgraded from a tropical depression, a hurricane deductible may occur. This deductible is based on a percentage and is normally higher than other deductibles.
- Wildfires. This flat fee deductible is common in states where wildfires are common.
- Windstorms/hail. Those who live in midwestern states that suffer from tornadoes are more likely to see a windstorm or hail deductible as tornadoes often cause this type of damage.
There are many different deductibles when it comes to insurance policies. Speak to your homeowners insurance company or agent to determine what your deductibles are so that you can be better prepared in case of peril.
A standard deductible
The AOP or All Other Perils deductible is the flat rate deductible a policyholder chooses when selecting their policy. The higher the deductible, the lower the monthly insurance premium. The lower the deductible, the higher the monthly premium. Select a deductive that fits your budget and research any other deductible your insurance company may require for future perils.
