What is the standard deductible in an HO-3?

The standard deductible in an HO-3 homeowners insurance policy is typically set at $500. This deductible applies to most types of losses covered under the policy. The purpose of a deductible is to share the risk between the insurance company and the policyholder; it represents the amount that the policyholder agrees to pay out of pocket before the insurance coverage kicks in.

Choosing a higher deductible, such as $500, can often lower the premium costs for the policyholder, making it a common choice among homeowners. The $500 amount is frequently the default for many insurance companies when a policy is initiated, though it can be adjusted at the time of purchase if the insured desires a different figure.

Lower deductibles, such as $50, $100, and $250, are available options but are less commonly selected as standard amounts for the HO-3 policy. These typically correspond to a higher premium due to the decreased out-of-pocket cost for the insured in the event of a claim. Understanding this helps clarify both the financial exposure for the insured and the premium calculations made by insurers.