How the deductible works
GeoVera policy deductibles are calculated as a percentage of the total single limit of coverage. As an example, if the single limit of coverage on your GeoVera residential earthquake policy is $500,000 and your deductible is 10%, your deductible would then be $50,000.
In the event of an earthquake our expert claims adjusters will determine the dollar amount of the covered loss to your home, contents, other structures and factor in loss of use if your home is uninhabitable. Your deductible will be applied to the covered adjusted loss amount. Your deductible does not need to be spent on repairs to your home before your policy pays for your loss. Once the adjusted covered loss amount exceeds the deductible a payment can be made. For example, in our scenario, if the adjuster has determined that you have a covered adjusted loss amount of $300,000 you would be entitled to a loss payment of $250,000.
Deductible Scenario
Single Limit$500K
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Deductible10%
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Deductible Amount$50K
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Loss Scenario
Adjusted Loss Amount$300K
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Deductible Amount$50K
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Amount Paid$250K
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Why is the deductible so high? Earthquake insurance is specifically designed to cover large disasters with high losses. Given the evidence, there is a significant probability of a major earthquake in years to come. In order to make the premiums affordable, deductibles are much larger for earthquake coverage. The deductible helps guarantee the ability to provide affordable premiums while still giving you the coverage you need. Smaller claims will typically fall below the deductible, which also helps to keep premiums much lower than they would otherwise be.
The deductible is the amount that is deducted from the overall insured loss. This means that the policyholder does not have to pay any portion of the deductible out-of-pocket before receiving a claim payment.