Adjust the Deductible

A deductible is the amount of loss paid by the policyholder before any loss is paid by the insurer. The larger your deductible is, the lower your premium will be – however, it is critical to note that a larger deductible also means more out-of–pocket payment by you when a loss occurs.

A policy may have different types and amounts of deductibles based on the peril. Many insurers offer homeowners insurance policies with percentage deductibles for windstorm damage instead of the traditional dollar value deductibles used for other types of claims, such as fire and theft.

One of the more common percentage deductibles is the hurricane percentage deductible, which applies to damage solely from hurricanes. Therefore, a policyholder may have a $1,000 deductible for fire losses, but a 2% deductible for hurricane losses, often making the hurricane percentage deductible a significant part of the policy. An earthquake policy with an additional third deductible could differ from all other deductibles for the insured property as well.



Qualify For Premium Discounts

Premium discounts vary widely by state and insurer. It is recommended that homeowners check the prices of multiple insurance companies before choosing a company to provide insurance coverage. The following list of potential discounts is not intended to be complete:

1. Discounts may be offered for purchasing home and auto insurance from the same insurer.

2. Discounts may be available for homes with burglar alarms, dead-bolt locks, or smoke alarms.

3. Discounts are typically provided for homes with fire sprinklers.

4. Discounts may be available for policyholders who are at least 55 years old a nd retired.

5. Certain professional, alumni, and business groups may qualify for discounts.

6. Sometimes insurers give discounts for long-term policyholders.

7. Homes that are constructed using current, model building codes or that have been retrofitted against hail or windstorm may be eligible for credits or discounts. Examples of qualifying characteristics include hurricane shutters, impact-resistant roof covering, superior roof connections, wind-resistant garage doors, or more.



Take Care of Your Home

Depending on the type of policy, the different dwelling coverage options could be: replacement cost coverage, actual cash value, special payment, functional replacement cost or market value coverage, or stated value.

The settlement of a loss will vary depending on the coverage you select at the time of purchase of your policy.

1. Prior Loss – A “prior loss” is one that has occurred to the home before you apply for insurance, whether or not the current homeowner was the owner at the time of the loss. The treatment of prior losses varies widely by insurer, and state. In certain areas, insurers may surcharge policies that have had a prior loss within a certain period of time.

2. Repair of Existing Conditions – Many insurers consider the existing condition of the home when determining the premium for the policy and also the availability of certain coverages or policies. Some insurers provide a price break to policies where there has been a recent roof renovation. Different roof types may also be eligible for a discount. Complete renovations of plumbing or electrical systems may be eligible for lower premiums.

3. Post Event – It is the responsibility of the insured, and it is in the insured’s interest, to reduce further loss once an incident has occurred. For example, if a window is broken during a hurricane, the insured should cover the window to prevent rain from getting in the house. The costs for these actions to prevent greater damage are usually covered by the insurer.



The Actuarial Foundation, a 501(c)(3) organization, was established in 1994 to help facilitate and broaden the profession’s contribution to society. The Foundation explores innovative ways to apply actuarial skills in the public interest and brings together broad partnerships of individuals and organizations to address social problems in creative ways.


The nonprofit Federal Alliance for Safe Homes, Inc. (FLASH®) is an award-winning coalition of government agencies, professional associations, and private industry committed to strengthening homes, safeguarding families, and protecting economic well-being by promoting disaster preparedness.

©Copyright 2015 by Federal Alliance for Safe Homes, Inc. (FLASH®) and The Actuarial Foundation.