For example, if I have sump pump overflow coverage limit of $25,000, and a $5,000 deductible- and I incur $35,000 of damages, which of the below happens?
(a) I pay $5,000 deductible, insurance pays $20,000 (Since $5,000 + $20,000 = $25,000 coverage limit), and I pay remainder of the $10,000
(b) I pay $5,000 deductible, insurance pays $25,000, and I pay remainder of the $5,000
This feels like an obvious question but I just want to make sure I understand how this works. Really hoping that (b) applies. Thanks!
Homeowners insurance: how exactly does coverage limit work with deductible?
byu/MAIRJ23 inInsurance
Posted by MAIRJ23
3 Comments
You bought $25k of coverage, you get $25k of coverage after the deductible. So you’d need to come.up.with the last additional $5k to get the job done.
It varies by company and when they apply your deductible. My company would write an estimate for $35k, apply the deductible to get to $30k, them cut you a policy limits check for $25k.
Some companies apply the deductible after reducing the estimate to policy limits.
Call your agent or call the claim service number if they don’t know to find out. If you’ve already filed a claim ask your adjuster.
35K in damages minus $5K deductible = a loss of $30K. Limit of Liability reduces the paid claim to $25K. (Depreciation may be a factor)