An AOP deductible – or All Other Perils deductible – is the amount you are responsible to pay out of pocket before your homeowners insurance takes effect and covers an insurable loss. You choose your standard deductible amount when selecting your insurance (subject to a minimum), which gives you control over your premium payments (more on that in the next section).
In the event of a covered claim, your deductible will be deducted from your claims payment and your insurer will pay the balance up to a maximum limit stated in your policy.
For example, if you make a theft claim for $1,200 and your standard deductible is $500, your insurer will first deduct your share of the claim – $500 – and pay out the claim balance of $700.
The larger your deductible, the lower your premiums tend to be. That’s because you take on a greater cost responsibility in the event of a claim – and your settlement payout will be less, too.
Though it might be tempting to take on the largest deductible available to lower your premium payments, it’s important to choose one you can comfortably afford at the time of a claim.
The standard deductible applies to most property claims each time you file a claim for theft, windstorms, fire, or hail.
They generally don’t apply when you file a liability claim.
Deductibles allow risk to be shared between you and your insurer. They also help keep premiums affordable by deterring small claims.
Keep in mind that your claims history impacts your home insurance premiums, so it’s smart to only file claims when you absolutely must.
A deductible is expressed either as a fixed amount or a percentage of the dwelling’s insured value. Your deductible options may vary from insurer to insurer. To see your deductible, just flip to the declarations page of your home insurance policy.
Read your policy and ask your agent if you have any questions about how your deductible works. That way, you know what to expect when it’s time to file a claim.