How does the deductible apply in terms of building and contents loss?

In the context of property insurance, the application of a deductible can significantly influence claims handling. The correct answer indicates that there is one deductible specifically for building loss and another for contents loss. This distinction is important because it allows policyholders to potentially recover more from their claims.

When a policyholder experiences a loss, such as damages to both the structure of the building and the contents within it, having separate deductibles means that the policyholder can file two separate claims. Each claim can then be subject to its own deductible, leading to potentially higher net payouts once each deductible is applied. This structure is beneficial in encouraging policyholders to accurately assess their losses and file claims appropriately without being penalized with a single, larger deductible that could lessen the overall recovery amount.

In contrast, the other options suggest a different structure for how deductibles work, but they do not offer the same flexibility or potential for recovery. For example, a combined deductible would apply to all losses regardless of type, possibly resulting in a higher out-of-pocket cost for the policyholder. The idea of no deductible eliminates the cost-sharing aspect, which is standard in most policies, while a statement implying that the same deductible applies to both could lead to frustrations if one loss type is more expensive than