You’ve heard a lot about deductibles. You know you have to pay this amount of money before your insurance company steps in to cover the rest of your loss. Yet, you may not really know your deductible. That is, you may not really have a clue about how much you’ll pay or if you have a flat deductible or a percentage deductible.
When buying any form of insurance, make deductible details a focus of your comparison process. It can help you understand what’s really to be expected when you have to file a claim.
What most people think of as an insurance deductible is what a fixed deductible is. It’s a flat rate – a specific dollar amount – that you are responsible for. Most home insurance policies will use this method. For example, your policy may have a $1,000 deductible. If you file a claim for $3,000 worth of damage, you pay $1,000, and your insurer pays $2,000. It’s the most straightforward method.
You’ll need to do a bit of math to figure out the percentage deductible on your policy. It’s actually still rather simple. Some policies don’t place a specific dollar amount on the claim. Rather, they require you to pay a percentage of your policy’s coverage. That’s much different than what a fixed deductible costs.
For example, if your policy has a 1 percent deductible, that means you pay just one percent of the amount of coverage you have. Let’s say your policy provides $200,000 worth of coverage for your home. You file a claim after a fire caused $3,000 worth of damage and you have a 1 percent deductible. That means you are responsible for the first $2,000 of the claim. That’s because one percent of $200,000 is $2,000.
That’s one area you will want to negotiate with your insurance company. Look at the cost of each type of policy. If you have the extra cash in savings, a higher deductible can lower your premium costs for coverage. However, it has to be affordable to you to be worth the investment. Compare several policies to find one that makes coverage for your needs easy to manage.
Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder
Search for a local agent with our agent finder map.
Read more about KayLynn's background.
You Don’t Need a Big Budget To Get Your Life Insurance Program Started
Don’t Let a Big Decision Stop You. Make Some Small Ones Instead.
Building a family timeline is fun and interesting. Start with birthdays, weddings, graduations etc. and build it out from there!
Share the Motivation for a Healthier Life with Your Family
You Don’t Have to Wait Until You Are Financially Ready to Pre-Plan Final Services
They May Not Eat Perfectly But They Certainly Can Eat Better
Final Services Are Changing. The Need for Life Insurance Is Not.
There’s More to Biking Than Tight Pants and Stylish Helmets
Of the Dozens of Reasons to Acquire Life Insurance, This May Be the Most Important
Motivation May Be a Factor But Lack of Space Should Not