Buyback Deductible

You may be familiar with this concept, even if you haven't heard the term. This is the portion of an insurance contract that allows the person buying it to opt to pay a higher premium in exchange for a lower deductible. The deductible is the amount the person holding the insurance pays before the insurance pays anything. This is often found with homeowners policies, though it can be attached to other types of policies as well (auto, for instance).

When you buy insurance, the person who gives you a quote (insurance speak for "estimate") may give you a range of premiums, and the deductibles that come with it. You can choose between that super-cheap policy for, say, $100 a month, and the bigger deductible of $3,000...or pay $200 a month for the $1,000 deductible. Often, it's up to the insured party (the person buying the policy) re: how much they want to pay when, and how likely they feel they will use said policy.

So if you're living somewhere with an annual flood, you'd better make sure you have flood coverage, and you can cover that deductible.