Is there any way you can bypass your home insurance deductible on a claim? The real, bottom line answer is no. However, there are rare times when an adjuster, in writing the estimate for damages, can “absorb” your deductible. When this happens, you probably have more damages than your policy can pay for, so absorbing your deductible is nice but its not like you saved a lot of money. The absorption occurs usually when there is a limit on a certain coverage, say for example water backup. You have a policy endorsement limit of $5,000, but in writing the estimate for damages, your loss exceeds the limit. The adjuster can absorb your $500.00 deductible into the estimate, and you might receive a check for $5,000, meaning you avoided the deductible. But the estimate shows your damages were in the $8,000 range, so you are still paying several thousand dollars out of pocket. You did save $500.00 though.
Otherwise, if your damages do not exceed your policy limits, the adjuster will pay based on an estimate, and the payment to you will be minus your policy deductible. After you pay the contractor the money the insurance company paid you, you still have to chip in the deductible to reach the estimate amount.
This is difficult for some insured to understand. They may think the deductible was already withheld from the check the insurance company paid to them, and therefore they do not have to address it again. The insurance company paid you the total estimate amount minus the deductible. The estimate will show the deductible amount as a negative, but that amount does not disappear; you have to take it out of your wallet and add it to the check the insurance company gave you, to equal the total amount of the estimate. Yes, it is a little confusing, and it can get more-so if you are owed another check from the insurance company once the repairs have been made. That check might be the recoverable depreciation that was held back until work was completed. Still, it does not matter if you address the deductible during the first check you give the contractor, or the final check – as long as you understand at some point you have to come out of pocket your deductible.
Many insured have questions about their deductible. Don’t be shy; call your adjuster or agent and have them explain it to you. Be advised there may be more than one type of deductible on your policy. Some policies have cyclone deductibles, or wind and hail deductibles. If you are not sure, read your policy. Also, after certain catastrophic events it is possible deductibles will be blanket waived. These are decisions made by insurance companies in coordination with a state department of insurance.
This article was written by a licensed insurance adjuster in the U.S.