How Do Deductibles Work?

Crushed roof

How Do Deductibles Work?



How Do Deductibles Work?

Deductible: that is the amount of money you pay first on any covered property loss before the insurance company pays a claim. You do not have to use the same deductible amount across all property sections of your farmowner’s insurance policy.

You could have a smaller deductible on your home while receiving a premium discount for the use of a higher deductible on higher value buildings. Also your specific scheduled farm personal property could have a different deductible than your blanket farm personal property coverage.

Watch the language in your farmowners insurance policy as to how the insurance company applies the deductible. The deductible could be applied on a per item, per section or per occurrence basis.

Let us take an example where we have experienced a large windstorm. We have damage to the roofing of our home, the roofing on two buildings and a grain auger has blown down.

Under a per occurrence deductible you would pay only one deductible because the windstorm is the one occurrence.

Under a per section deductible you would pay three deductibles, one on your home, one under the building section and one under the farm personal property section for the grain auger.
Under a per item deductible you would pay four deductibles, one on your home, two for each of the buildings and one for the grain auger.

(Excerpt from Mike’s book The Ultimate Guide To Simplifying Your Farm Insurance)