Calculating Home Insurance Deductibles and Co-Insurance

WHAT IS A DEDUCTIBLE AND HOW DOES CO-INSURANCE WORK?

What is a deductible?

  • A¬†deductible¬†is the amount¬†you¬†pay out of pocket when¬†you¬†make a claim.
  • Deductibles¬†are usually a specific dollar amount, but¬†they can¬†also be a percentage of the total amount of insurance on the policy.

What is co-insurance?

  • Co-insurance is a percentage of a claim that you are responsible to pay, with the rest paid by your insurance company.
  • Co-insurance typically applies after your deductible¬†has been met.
  • Co-insurance can apply if your home is insured at less than 80% of the full replacement cost value (cost to re-build).

What is a standard deductible?

  • A standard deductible is a specific dollar¬†amount and is the most common type of deductible.
  • Co-insurance does not normally apply when your policy includes a standard deductible.

Figuring out how % deductibles and co-insurance work can be confusing.  Don't worry, we here at Budget Insurance & Tucson Insurance Solutions are here to help!

Simply use the calculator below to see how deductibles and co-insurance work for any claim scenario.

For Mexico Home Insurance purposes, please keep in mind that % deductibles and co-insurance ONLY apply to catastrophic coverage (Hurricane, Flood & Earthquake).  All other claims (fire, theft, etc...) are subject the standard deductible as listed on  your quote or policy. 

 


SAMPLE QUOTE - Click to expand this image

Here's how the math works out:

% Deductibles are calculated based on a % of coverage(s) on your policy.

Co-insurance is the portion of the clam that you are responsible for after your deductible has been met.

 

Calculation Example:

  • Structure Coverage:¬† $100,000
  • Claim Amount:¬† $10,000

1% Deductible = $1,000 ($100,000 x 1% = $1,000)

10% Co-insurance = $900  ($10,000 claim, minus $1,000 deductible = $9,000 x  10% = $900)

Your out of pocket cost on a $10,000 claim = $1,900

 

Structure/Building deductible calculations above are based on the structure/building coverage amount as listed on your quote/policy.

Personal property deductible calculations above are based on the personal property coverage amount as listed on your quote/policy.

 

Contact Us!

Our knowledgeable agents, can work with you to make sure you've got the coverage you need, while at the same time using all possible credits and discounts to make that coverage affordable.  We want to help you meet your goals, and make sure what's important to you is protected!
Posted in Home Insurance, Mexico Insurance.