What are deductibles, and what deductibles should I be opting for?

Insurance and Insurance Jargon can be confusing. Comtinue reading to understand what a deductible is and how to choose what is best for you.

• What is a deductible:

  • A deductible is the set specified amount that you pay in the event of a claim before your insurance company pays their share per your policy terms.

  • You can think of it as “your share” before they pay “their share”.

  • A quick example: You get into an accident and you need your vehicle repaired. Your deductible is $500 and the repairs cost $5,000. You will pay $500 and the company will pay the remaining $4,500.

  • A higher deductible will lower your premium and a lower deductible will raise the premium.

• What policies have deductibles and how do they differ?:

  • Most personal property policies have deductibles. This includes for example, auto, home, condo, rental and umbrella policies .

  • Sometimes a policy has a set dollar amount. Some policies, like an earthquake policy, will have a percentage of your home policy dwelling amount coverage, like 15%.

• Mistakes to avoid:

  • Not every coverage on a given policy has a deductible.

  • Nor will the same deductible apply to every coverage.

  • It is very important to have a conversation with your agent if you have any questions about different deductibles.

  • Not understanding deductibles and not knowing your specific deductible amount can make handling claims stressful.

• Choosing the deductible that is right for you:

  • One size does not fit all".

  • Every person’s situation is different and knowing what your finances are is an important part in deciding what deductible to go with.

  • If you are a confident driver maybe a large deductible is right for you. If you have high risk or new drivers on the policy maybe a lower deductible makes more sense.

  • Deductibles can be changed at any time and so can your needs.

The best thing you can do is keep in contcact with your agent. Develop a rapport with them so you can always get a straight answer with no hassle. If you have questions about your deductibles, give us a call at 800-350-0236. We would love to assist you with any help you may need.