Most home insurance policies have a deductible, that typically ranges from $500 to $2,500. This may be an expense that is too great for the homeowner to bear when filing a claim. What happens when one can’t afford this deductible.
First, the insurance deductible is mistakenly thought of as the amount that the insured has to pay the insurance company in order for the insurance coverage to go into effect. This is not the case though. If the deductible is set at $1,000, the insured simply needs to contribute $1,000 towards the repairs to the home as the result of a covered claim. Depending on the repair company the homeowner is working with to repair whatever damage occurred to the home, the homeowner may be able to work out some sort of payment plan with the repair company. This will get the repairs moving while reducing the immediate unachievable burden of paying the company $1,000.
What to do if you cannot afford your homeowners insurance deductible
If damage occurs to your home and you can’t afford the deductible stated in the home insurance policy, you should still file a claim with your insurance provider. This way the claims process can move along and both you and the insurer can work with the repair company to start getting repairs done sooner rather than later. Some repair companies and insurance companies will be more lenient with payment plans and deductibles than others. It is always helpful to have a little extra cash on hand for instance like this, if possible.
An important note is that when the damage that occurred results in less of an expense to cover than the amount of the deductible, then the insurance company and your policy will be of no help to you. In this case, it would make more sense to simply pay for the repair costs out of pocket and not file a claim. In such cases, you still may be able to work out some sort of payment plan with the repair company if needed.
Looking ahead to future potential situations similar to the above, it may be worthwhile for you to look at cheaper home insurance options so that you can free up more cash to save for the deductible payment or for any other unexpected expense that may arise. Talk with your insurance agent to see what options might be available to you.
Summary
If you can’t afford your home insurance deductible, fear not. You still may be able to file a claim and get started on repairs, just know that you will have to pay your deductible in full at some point.
