Get the most out of your home insurance with a deductible to suit your needs.
Choosing the right deductible is vital to protecting your home and finances. Every policy has a deductible so every person buying homeowners insurance will have to make this decision (no, there’s no avoiding it!).
Selecting a deductible limit that suits your needs and budget enables your home to stay protected, your money to stay in your pocket, and your belongings to stay safe. In short, what more could you want?
What is a deductible?
A deductible is a total amount that you have to pay out-of-pocket before insurance kicks in. If you have a $1,000 deductible on your home insurance, in the event of an accident or damage from a listed peril, you are responsible for the first $1,000 of accident-related payments, and then the insurance company will handle the rest (up to the policy limit).
There are generally two types of deductibles: a dollar-amount and a percentage based. The difference between them is how your deductible is calculated, and there are a couple of factors depending on how much your home is valued at. Once calculated, the amount a homeowner pays if he or she files a claim is fixed for the length of that policy.
How to Choose:
When selecting a deductible, you’re really balancing the short-term cost that you can afford (your deductible) and the long-term cost of your policy (your premiums). A higher deductible means lower monthly premiums. But before selecting a high deductible right off the bat, consider if you can afford this high out-of-pocket cost in the event of an accident.
There are other reasons it makes sense to raise your deductible. Every insurance company is different but typically, if you file a claim, the cost of your premium will rise because, in essence, you’ve become a riskier and costlier homeowner to insure. And the more claims you file, the higher your premium will be!
For help securing the right deductible for your needs, visit Chambers & Company Insurance Brokers today!