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 enable 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 deducible is calculated, and there are a couple of factors depending on how much your home is valued at. Once calculated, a homeowner pays if they file 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). The more you can afford in the short-term, the more you’ll save in the long-term as a higher deductible means lower monthly premiums. Before selecting a high deductible right off the bat, consider if you can afford this cost out-of-pocket 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!
Want to know your best of securing the right insurance deductible? Talk to a trusted industry expert at Chambers & Company Insurance Brokers. Our agents in California know the risks of each home, and can take steps to safeguard your house and belongings with reliable home insurance in Camarillo and neighboring cities in California!