Home insurance exists to protect you and your belongings from perils (those unexpected events that cause damage). But before your insurance provider can swoop in to save the day, you have to pay your deductible.
Your deductible is the amount you’re responsible for paying in the event of a covered claim before the insurance provider pays the rest—up to the maximum limit in your policy.
The idea is simple enough, but some home insurance policies have different deductibles for different types of claims.
In this case, the deductible that applies to most claim types is your AOP deductible.
Let’s dive a little deeper.
What Is an AOP Deductible?
An AOP deductible (or all other perils deductible) is the standard deductible in home insurance because it’s the one that applies to the most perils and, therefore, usually the one you’ll be paying when you file an approved claim.
While a few perils require their own special deductible, most of the perils your home insurance covers—like theft or fire—fall under the “all other perils” deductible (hence the name).
Your AOP deductible will usually be a flat rate that you get to choose, but your insurance provider will provide specific amounts to choose from.
AOP deductibles usually range from $500 to $5,000, with the most common choices being $1,000, $2,500, or $5,000.
Understanding Other Types of Deductibles
Outside of your AOP deductible, insurance policies can have special deductibles that apply when damage is from a specific type of peril—generally in states where that peril is unusually common. Special deductibles compensate for the increased risk the insurer takes on in these states.
As a result, you may have one, two, or no special deductibles outside of your standard AOP deductible—all based on the location of your home.
Unlike your AOP deductible, these are often a percentage of your dwelling coverage instead of a flat rate. Percentage options may range from 1% to 10%, depending on the type of deductible.
Special deductibles include:
- Hurricane Deductibles: These kick in when damage is due to a hurricane named by the National Weather Service. While these are usually a percentage of your dwelling coverage, OpenHouse lets you choose between percentage deductibles of 2%, 3%, 5%, and 10% or flat rates of $1,000, $2,500, $5,000, and $10,000.
- Named Storm Deductibles: These deductibles apply when damage is done by any named storm by the U.S. National Weather Service. This expands beyond hurricanes to include storms like tropical storms. This deductible is also usually a percent rate.
- Wind/Hail Deductibles: A wind and hail deductible is exactly what it sounds like, kicking in when damage is caused by wind or hail. Again, these are usually a percent rate.
- Wildfire Deductibles: Wildfire deductibles apply in states where wildfires are common should a wildfire damage your home or belongings.
- Flood, Earthquake, and Sinkhole Deductibles: These coverages are unique because they aren’t included in home insurance and require a separate policy outside your home insurance provider. For example, flood insurance is offered through the National Flood Insurance Program (NFIP). We included them here because you can expect these policies to have their own deductible.
Home insurance policies in certain states will almost always have a special deductible to match that state’s weather. For example:
- Florida policies always include a hurricane deductible.
- States in Tornado Alley almost always have a wind and hail deductible.
- California policies often include a wildfire deductible.
You can always check your declarations page or contact your agent if you don’t know your policy’s deductible types and rates.
What Does All Other Perils Include?
“All other perils” doesn’t mean everything under the sun. Rather, perils that fall under your AOP deductible are those that your policy covers but don’t have a special deductible (like the hurricane deductible).
The perils you have coverage for depends on your insurance provider and policy, but a standard home insurance policy usually includes protection for damage from:
- Wind and hail
- Fire, lightning, and smoke
- Snow, ice, and sleet
- Frozen pipes
- Theft
- Vandalism
- Civil disturbances
- Vehicles and aircraft
- Explosions
- Electrical current (like downed power lines)
- Falling objects (like a tree)
- Sudden and accidental water damage
Of course, a couple of these perils can end up falling under a separate deductible if you have one. For example, wind damage or a falling tree may fall under your hurricane deductible if:
- The wind or falling tree was due to a hurricane
- And you have a hurricane deductible
Other perils like theft, explosions, and home fires always fall under the AOP deductible.
You can also expect that home insurance companies won’t cover normal wear and tear or damage from ignoring required maintenance.
When Does the AOP Deductible Apply?
By now, you know that the all other perils deductible applies when covered damage is caused by any peril that doesn’t have its own special deductible. To add to that, liability coverages don’t have a deductible at all, so the AOP deductible doesn’t apply in cases of personal liability or injury.
Other than that, there are two rules to remember:
- The AOP deductible is not annual, meaning you’ll have to pay it for each claim if you have multiple claims in a year.
- Special deductibles are annual, but once paid, the AOP will apply (though it’s uncommon to be hit by the same peril twice in a year).
What does this look like in practice?
Examples of Deductibles In Action
To show you how your deductibles work together, let’s go over two examples.
Example Home Insurance Policy #1
Dwelling coverage: $200,000
AOP deductible: $1,000
Hurricane deductible: 2%
In this example, if a hurricane causes $15,000 in damage to your home, your hurricane deductible applies. You would pay $4,000 (because $200,000 x 0.02 = $4,000), and your insurance would pay the remaining $11,000 ($15,000 – $4,000 = $11,000).
If you suffered any other peril, like theft or fire, you would only pay your $1,000 AOP deductible, and your insurer would cover the rest up to your dwelling coverage limit.
However, if a second hurricane hit your home in the same policy year, causing another $15,000 in damage, your AOP deductible would apply because you already paid off your hurricane deductible for the year. In this case, you would pay $1,000, and your insurer would cover the remaining $14,000.
Example Home Insurance Policy #2
Dwelling coverage: $500,000
AOP deductible: $2,500
Hurricane deductible: 3%
Wind and hail deductible: 1%
In this example, if a hurricane causes severe damage to your home, totaling $100,000, your hurricane deductible applies. You would pay $15,000 (because $500,000 x 0.03 = $15,000), but your insurance would pay the remaining $85,000 ($100,000 – $15,000 = $85,000).
If later you experienced $10,000 worth of hail damage to your roof, your wind and hail deductible would apply. You would pay $5,000 (because $500,000 x 0.01 = $5,000), and your insurance would pay the remaining $5,000 ($10,000 – $5,000 = $5,000). This is also the case if the damage was from wind and the wind wasn’t from a hurricane.
However, if you experienced another instance of hurricane, wind, or hail damage in the same policy year, causing another $10,000 in damage, your AOP deductible would apply because you already paid off your special deductibles for the year. In this case, you would pay $2,500, and your insurer would cover the remaining $7,500 ($10,000 – $2,500 = $7,500).
All Other Peril vs All Perils
If you’re wondering what the difference is between “all other perils” and “all perils,” we can’t blame you. They’re both common home insurance terms and nearly identical. The best way to distinguish them is that all other perils refers to your “all other perils deductible,” while all perils refers to an “all perils insurance policy.”
And despite their closeness, they have nothing to do with each other.
While your AOP deductible is the standard deductible we’ve gone over in this blog, all perils is one of two types of insurance policies you can have:
- All perils (also called open perils) is a type of insurance policy that protects against a range of perils except for those the policy directly says it doesn’t cover. These policies are usually more expensive.
- Named perils is a type of insurance policy that also protects against a range of perils, but instead of listing what it doesn’t cover, it lists what it does.
You will have an all other perils deductible regardless of whether your policy is all perils or named perils.
At OpenHouse, we offer a type of named perils policy called “broad perils” that provides additional optional coverages.
Broad Perils: Protection for Additional Perils
Broad form insurance covers all perils that basic insurance covers but expands it to include additional risks to your home, other structures, and belongings.
Broad form perils can come with a higher premium, but they provide greater peace of mind and financial protection when the unexpected happens. And some policies, like OpenHouse’s, are customizable so that you choose what you do and don’t want to pay for. In these cases, you can actually lower your premium.
Extra coverages you may be able to add in a broad perils policy include:
- Animal liability
- Golf cart coverage
- Ordinance protection
- HOA
- Water backup
- Screened enclosure coverage for hurricanes
To give you an idea, most home insurers don’t provide water backup protection should water back up through your pipes or sewer system, and screened enclosures aren’t usually covered in the event of a hurricane.
When it comes to broad perils, some fall under your AOP deductible and some a special deductible. For example, screened enclosure coverage for hurricanes would fall under the hurricane deductible.
AOP Deductible FAQs
What does AOP mean in insurance?
In insurance, AOP stands for “all other perils” and is in reference to your AOP deductible. This is how much you have to pay before your insurance kicks in for the majority of covered perils.
What is an all perils deductible?
There’s no such thing as an “all perils” deductible. There is an “all other perils” deductible, which applies to most claims, and an “all perils” policy, which is a policy that covers all perils except those it lists as excluded. These tend to be pricier, while “broad perils” policies are more customizable.
What is the most common deductible in home insurance?
The deductible that applies the most often is your standard deductible or AOP deductible. These deductibles are usually flat rates, with the most common options being $1,000, $2,500, and $5,000.
Are all perils included in homeowners insurance policies?
The perils included in a home insurance policy vary from policy to policy. No policy covers all perils, but you can review your policy to see which perils are covered.
What perils are not covered?
Perils that home insurance usually doesn’t cover include:
- Floods
- Sinkholes
- Earthquakes
- Long-term leaks
- Long-term infestations
- Normal wear and tear
- Intentional damage
- Homeowner negligence
Tailoring Your AOP Deductible
When it comes to home insurance, some things are in your hands, including your AOP deductible rate. You’ll want to consider this carefully because the higher your deductible is, the lower your premium will be. In the same way, the lower your deductible, the higher your premium.
But how do you decide the right balance for you?
We recommend looking at your monthly budget and savings goals to get a feel for what an acceptable premium looks like to you. Then, look at your current emergency savings to see what you can afford in an emergency.
You may be tempted to calculate future savings, but it’s important to remember that a peril can happen at any time—even tomorrow. (That’s why you have home insurance!)
If you find yourself needing a lower premium, know that a high AOP deductible isn’t the only way to get it.
At OpenHouse, we also offer unique lifestyle savings for things like owning smart devices or being a safe driver, blood donor, pet owner, or gym member.
Whatever you decide, the most important thing to remember is that you can always update your policy to match where you are at the moment.