Insurance Deductible

What is a Insurance Deductible?

An insurance deductible is the amount you pay out of pocket before your insurance coverage begins. For roof insurance claims, the deductible is subtracted from your total claim settlement, and you’re responsible for paying this portion of the repair or replacement costs directly.

In simple terms: Your deductible is your share of the repair bill. Insurance pays the rest.

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Table of Contents

• How Deductibles Work
• Types of Deductibles
• How Your Deductible Is Calculated
• When You Pay Your Deductible
• Choosing the Right Deductible
• Common Deductible Mistakes
• Real Colorado Springs Examples
• Common Questions
• Related Insurance Terms

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How Insurance Deductibles Work

When you file a roof insurance claim in Colorado Springs, your deductible determines how much you pay versus how much your insurance company pays.

Basic Deductible Principle

Formula:

Insurance Payment = Total Claim Amount – Your Deductible

Simple example:

• Total roof replacement cost: $25,000
• Your deductible: $2,500
• Insurance pays: $22,500
• You pay: $2,500

Why Deductibles Exist

Insurance companies use deductibles to:

• Share risk: You have “skin in the game,” making you more careful about property maintenance
• Prevent small claims: Deductibles discourage filing claims for minor damage
• Lower premiums: Higher deductibles mean lower monthly insurance costs
• Reduce fraud: Out-of-pocket costs discourage fraudulent claims

When Your Deductible Applies

You pay your deductible:

• Once per claim: Not per repair item or per contractor
• For covered losses only: If your claim is denied, you don’t pay a deductible
• Regardless of fault: Even for covered perils, you pay your deductible

You do NOT pay your deductible:

• When just getting an estimate
• If your claim is denied
• For liability claims (when you damage someone else’s property)
• Twice if the same storm damages multiple structures (typically one deductible covers all damage from one event)

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Types of Insurance Deductibles

Colorado Springs homeowner policies typically use one of two deductible types:

1. Flat Dollar Deductible

How it works: A fixed dollar amount you pay regardless of claim size.

Common amounts: $500, $1,000, $2,500, $5,000

Example:

• Your deductible: $1,000 (flat)
• Claim #1 (small repair): $3,000 total → You pay $1,000, insurance pays $2,000
• Claim #2 (full replacement): $30,000 total → You pay $1,000, insurance pays $29,000

Pros:

• Predictable – you always know your out-of-pocket cost
• Better for smaller homes or lower dwelling coverage
• Easier to budget for

Cons:

• Higher premiums compared to percentage deductibles
• Less common in Colorado (percentage deductibles dominate)

2. Percentage Deductible

How it works: A percentage of your dwelling coverage amount (Coverage A).

Common percentages: 1%, 2%, 2.5%, 5%

Example:

• Your dwelling coverage: $400,000
• Your deductible: 2%
• Your deductible amount: $8,000 (2% of $400,000)

• Some contractors offer payment plans
• Some accept the initial insurance payment as d

This $8,000 deductible applies to every claim, regardless of actual claim cost.