Property Insurance FundamentalsQuestion 222 of 474
A percentage deductible on a homeowners policy differs from a flat deductible in that it is:
a.Figured as a percent of the annual premium
b.A fixed dollar amount taken from each loss
c.Figured as a percent of the dwelling limit
d.A fixed dollar sum applied once per year
Explanation
A percentage deductible is stated as a percent of the amount of insurance on the dwelling, so it grows every time that limit is raised, while a flat deductible stays at a set dollar figure until it is changed. The premium-based answer is not how any deductible is computed. The two fixed-dollar descriptions define the flat deductible, which is the thing being contrasted.
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