Tips For Picking The Right Home Insurance Deductible


If you are in the process of purchasing home insurance, you'll eventually need to decide on what kind of deductible you want to have. The deductible will play a big role in what kind of premiums you pay each year, which is what you want to pick the one that is best for you. Here is what you need to know to make a decision.

Know If You Can Pay The Deductible

A deductible is an amount that you need to pay before the insurance company will cover the rest of the repair bill. However, it is crucial that you have that money on hand so that you can pay it if necessary. While you may think that you are saving money by picking a very high deductible, know that this could cause a big problem if you do not have that money on hand to actually pay the deductible when necessary. Always pick a deductible that you know you can handle. 

Know What Kind Of Incidents You Want To Use Insurance For

If you are hoping to use homeowners insurance for some of the smaller repairs that need to be made to your home, such as roof damage after a hail storm, then you want it to be practical when it comes to how high your deductible is. If you have a really high deductible, then it may not make sense to use insurance to make the repair. 

For example, if your deductible is $3,000 and the repair bill is $3,500, then you end up making a claim to only get $500 worth of insurance coverage. This may not be worth it if your premiums will go up as a result of making a claim. A smaller deductible will be the better option to make claims for smaller repairs. 

Know When To Use A Percentage Based Deductible  

Insurance deductibles typically come in one of two forms, as a flat fee that you pay to use your insurance or a fee based on a percentage of your coverage. The percentage option may not make sense if you have a really expensive home that you want to ensure, because 1% of the coverage can end up being a lot of money.

However, the 1% deductible option may make perfect sense if you have a relatively inexpensive home. The deductible may be slightly higher than your flat fee deductible options but results in lower premiums that are easier to afford on an annual basis.

Reach out to your insurance agent if you have questions about your deductible. 

About Me

Finding A Better Insurance Plan

When I found out that my wife was pregnant, I was just as nervous as I was excited. I realized that our health insurance wouldn't cover the entire bill, but I had no idea how bad it would really be. After the baby came, we were slapped with steep, overwhelming medical bills and it was really frustrating. After having that experience, I decided to shop around for another insurance plan that would cover us better. Check out this website to learn more about insurance in general, so that you aren't left wondering what to do with your family health insurance plans.

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