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Diminishing Deductible for Home Insurance

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As a homeowner, you’re in control of the color on your walls and the flooring in your kitchen — but you can’t control the unexpected. That’s why we’re offering Diminishing Deductible as a new feature you can purchase to help save for surprise expenses. With this coverage, we’ll credit (lower) your deductible to help you better prepare for the out-of-pocket costs when you have a claim.

It’s one of the ways we give you control over what you pay.

So how does it work? It’s simple!

While your homeowners insurance will be there to step in and cover expensive damages, you’ll probably have a deductible to pay first, which can often be a financial setback in itself.

Our Diminishing Deductible rewards you for being a responsible homeowner by crediting your deductible $100* each year, up to your policy maximum.

Let’s take a closer look so you know exactly how you can benefit from our homeowners insurance with Diminishing Deductible.


Your home is your castle.

And you work hard to take care of it.

Sometimes, owning a home can be full of surprise costs.

But what if you could have more control over what you pay when the unexpected happens?

American Family Insurance has a new, affordable way to protect your home and your wallet from surprise expenses.

Diminishing Deductible is an optional coverage that helps you reduce your out-of-pocket expenses when you need to file a homeowners insurance claim.

Here’s how it works:

You’ll earn a lower deductible immediately when you add Diminishing Deductible Coverage to your homeowner’s policy.

That’s right, we credit your deductible $100 on Day 1!

Then, we’ll credit your deductible $100 each year, up to your policy maximum.

And you can watch your deductible diminish over time!

What does this mean for you?

Suppose you’ve been claims free for several years.

And then, out of nowhere a bad storm rolls in and hail causes 5,000 dollars in damage to your roof.

Thankfully, your American Family homeowners policy covers hail damage.

Usually, you would need to pay your 1,000-dollar hail deductible before your insurance covered the remaining balance.

Except you have Diminishing Deductible coverage!

Because this is the first homeowners insurance claim you’ve filed in six years since you first added Diminishing Deductible to your homeowners policy, American Family has reduced your deductible by 600 dollars.

After you pay your lowered deductible of 400 dollars, American Family covers the rest.

That’s Diminishing Deductible working for you!

Following your claim, your deductible resets to year 1 with your deductible credited $100 so you can go right back to continuing to earn a reduced deductible amount again.

Isn’t it time you earned a reward for being a responsible homeowner?

Learn more about how Diminishing Deductible can help you protect your savings from the unexpected.

Contact your American Family Agent today!

How Does Diminishing Deductible Work on Home Insurance?

We’ll start with the basics. When purchasing homeowners insurance, you’ll select a deductible. A deductible is a set amount of money, typically $1,000, you’ll pay out of pocket before your insurance kicks in to cover the repairs or replacement costs if you file a claim.

Homeowners Insurance Deductibles Explained

We've highlighted some key details about home insurance deductibles, so if the time ever comes to a file a claim, you know what to expect.

At American Family, we know that a deductible isn’t always the easiest thing to pay after the unexpected. But with our Diminishing Deductible, we hope to ease that burden by offering a way to reduce your deductible amount that you owe before your insurance coverage kicks in.

Here’s how it happens:

Earn Credit Immediately: We’ll credit your deductible $100* from day one. Let’s say you have a $1,000 deductible. Good news — it just dropped to $900.

Watch Your Deductible Diminish: Your deductible will continue to reduce each year at policy renewal, up to your policy’s maximum limit, as long as you maintain your policy with us.

Savings When You Need It: If you have a claim, you’ll pay a reduced deductible amount thanks to your Diminishing Deductible coverage. Your deductible then resets, so you’ll go right back to earning a reduced deductible amount.

What types of unexpected events does my diminishing deductible cover?

Great question. Your Diminishing Deductible can be applied to the following types of deductibles:

  • Property deductible (such as fire, lightening, smoke damage and theft)
  • Windstorm or hail deductible
  • Earthquake coverage deductible
  • Named storm deductible (covers wind and hail damage from a tropical storm or hurricane that damages the dwelling, other structures and personal property)
  • Sewer backup, septic backup and sump pump overflow deductible

What happens if you file a claim and have to pay a deductible?

That amount you’ve been earning the last few years will be subtracted from the deductible amount you owe.

Let’s put it into perspective: the siding of your home blew off due to a windstorm and you need to file a claim to repair the damages. The cost to repair the siding is $5,000, but before your insurance kicks in to cover the cost, you have to pay your $1,000 windstorm or hail deductible. You were planning on renovating your kitchen this year and aren’t happy about handing over a $1,000 deductible before your insurance pays to cover the damage — and thankfully, now you don’t have to.

Since this is the first homeowners insurance claim you’ve filed in six years, you’ve earned a $700 Diminishing Deductible amount and knocked your deductible amount to $300. Now you’ll only have to pay $300 before your insurance kicks in to cover the remaining $4,700.

So what’s the catch?

There isn’t one! We want to help you be more comfortable and prepared with the out-of-pocket costs that come with filing a home insurance claim. This new coverage is a way to proactively manage the financial hits that can come with the unexpected.

Once you’ve paid to add this coverage to your homeowners policy, you’ll continue to earn a lower deductible each year up to your policy maximum.

If it’s ten years down the road and you still haven’t filed a claim, that reward will stay put until you need to use it. Just make sure you don’t let your policy lapse for more than 60 days, cancel your policy or remove this coverage from your policy since you won’t be able to get the accumulated amount back.

Is a Home Insurance Diminishing Deductible Worth the Cost?

Consider this:

  • When you have a claim, you’ll pay less out of pocket thanks to your Diminishing Deductible.
  • Your deductible will continue to reduce each year at policy renewal, up to your policy maximum.
  • You'll begin earning a lower deductible immediately.
  • Depending on your deductible amount, you could reach a point where you pay nothing out of pocket towards your deductible!

Prepare Your Finances for the Unexpected With Diminishing Deductible for Home Insurance

When you insure your home with American Family, you don’t just gain a piece of paper with your policy — you gain extra protection and peace of mind. Our Diminishing Deductible is designed to ease some of the stress that comes with the claims process — specifically the out-of-pocket expenses. Connect with your American Family Insurance agent to find out more about our home insurance Diminishing Deductible and how its immediate earning benefits can help you financially protect what matters most.

Diminishing Deductible does not apply to all property deductibles.

Some coverages may not be available in your state. Available at renewal for existing policyholders. Please speak with your agent to learn more about your coverage options.

Windstorm or hail deductible not applicable in GA. Named stormed deductible applies only to GA.

* Maximum limit of $1,000 for homeowners insurance. Maximum limit of $500 for renter insurance, condo insurance and manufactured home insurance.

This coverage is not available in MN at this time.

Some coverages may not be available in your state or on your specific policy form. Please speak with your agent to learn more about your coverage options.