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A RocketLevel playbook for restoration owners on how the deductible actually works and the one line around it you cannot cross, backed by decades of experience in the trade. About a 10-minute read.
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Reviewed October 2026. Policy forms and state insurance rules vary, and deductible statutes change. Use this page to know what to ask, then confirm with your state insurance regulator or a construction attorney before you rely on it.
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Every insured job has a deductible, and plenty of homeowners misunderstand it. The check comes in lower than the repair total, the homeowner is stressed and short on cash, and somewhere in that conversation a contractor gets asked, or decides to offer, to make the deductible disappear. That moment feels like customer service, and in several states it is an offense. The statutes are below.
For the rest of the claim, Running a Successful Residential Claim, Start to Finish walks it start to finish, and What a Contractor May and May Not Do on a Claim: Staying Out of Unlicensed Public Adjusting covers the other major boundary in claims work.
A deductible is the portion of a covered loss the policyholder agreed to pay out of pocket in exchange for a lower premium. It is set in the policy, and it applies to the claim. Learn to explain the next part plainly, because it confuses a lot of homeowners.
The deductible is not a separate check the homeowner writes to the carrier. The carrier applies it to the claim and nets it out of what they pay. On most losses the first payment is the actual cash value (ACV), the depreciated value of the work, with the deductible subtracted before the check is cut.
Run the whole thing once with real numbers so you can draw it for a homeowner on the back of an estimate.
Replacement cost value (RCV) of the repair, $10,000. Depreciation the adjuster applies, $2,000. Deductible, $2,500.
Actual cash value is $10,000 minus $2,000, which is $8,000. The first check is $8,000 minus $2,500, which is $5,500. Once the work is finished and documented, the carrier releases the $2,000 of recoverable depreciation. The carrier has now paid $7,500. The homeowner pays you the $2,500 deductible. You have been paid the full $10,000.
Two things to say out loud from that. The deductible is applied once, against the claim as a whole, and it is never given back in the later payments. And if the policy pays actual cash value only, with no recoverable depreciation, the homeowner owes the deductible plus the $2,000 that never comes back. Have that conversation in week one, before the final invoice.
A short first check is the deductible and the withheld depreciation doing what the policy says they do. The carrier is not underpaying. Knowing this cold lets you set the expectation up front, so a smaller-than-expected first check reads as normal instead of alarming.
The deductible is the easiest money to let slip, because collecting it is awkward and usually happens after the work, when you have the least pull. The fix is to make it a standard, up-front part of how you open every job, never an improvised ask at the end.