Call Us Call or Email Us Today
Homeowners Insurance HOME Read More
Auto Insurance AUTO Read More
Renters Insurance RENTERS Read More
Business Insurance BUSINESS Read More
Life Insurance LIFE Read More
Watercraft Insurance WATERCRAFT Read More

Houston insurance

What is your insurance deductible?  Do you know it and what it means?   Understanding how it affects your premium can help you save money. Be sure to know your insurance deductible to avoid a big surprise when you have a claim.

A deductible is basically the amount you pay first of an insured loss.   Your deductible is  “deducted” from an insured loss.   It is what you self-insure or pay for.    Deductibles are necessary to keep the premiums affordable.   Deductibles have been an essential part of the insurance contract for many years and represent a sharing of the risk between the insurance company and the policyholder. When repairing your home or replacing personal possessions, the amount of the deductible would come out of your own pocket.

A deductible can be either a specific dollar amount or a percentage of the total amount of insurance on a policy. Generally speaking, the larger the deductible, the less a consumer pays in premiums for an insurance policy. Deductible amounts can be found on the declarations (or front) page of standard homeowners and auto insurance policies.

Here is how it works: if you have a $500 “dollar deductible,” that $500 would be deducted from your claim. So, if your insurance company has determined that you have an insured loss worth $10,000 you would receive a claims check for $9,500.

Percentage deductibles are calculated differently. They are based on a percentage of the home’s insured value. So if your house is insured for $100,000 and your home insurance policy has a 2 percent deductible, $2,000 would be deducted from the amount you are reimbursed on a claim. In the event of the $10,000 insurance loss, you would be paid $8,000.

Deductibles in many parts of the country have been going up. In hurricane prone states, where there is a greater risk of a major catastrophe, special deductibles may apply for homeowners insurance claims when the cause of damage is attributable to a hurricane. These deductibles are generally higher and may take the form of a percentage of the policy limits.

Deductibles for property damage work differently than, for example, a typical health insurance policy where there a single annual deductible for the policy. With an auto or homeowners insurance policy, the deductible applies each time you file a claim.

Raising Your Deductible Can Save Money

One of the best ways to save money on a homeowners or auto insurance policy is to raise the deductible. For example, for auto insurance, increasing the dollar deductible from $200 to $500 can reduce collision and comprehensive coverage premium costs by 5 to 30 percent.  But, remember that if you have a loss, this amount will be deducted from your insurance claim and that you will be responsible for the difference.

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
Facebook
Twitter
LinkedIn
Blog
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
Carriers
© Copyright. All rights reserved.
Powered by Insurance Website Builder