How Do I Choose the Right Home Insurance Deductible?

Maximize your home insurance by choosing the best deductible for you!

Deciding on your home insurance deductible can be a stressful balancing act.  Before starting the process, learn what a deductible is and how it affects you.

In plain words, a deductible is the amount of money you agree to pay out-of-pocket before your home insurance kicks in.  For example, if you have a deductible of $100 and you made a claim for $300, your insurance company would pay $200.

Many insurance companies have a minimum deductible that you must assume, however they offer you the opportunity to balance your deductible against your premium.  This means that the higher deductible that you agree to pay, the lower your annual premium will be.  While increasing your home insurance deductible is a common money-saving strategy, it’s important to know exactly what risks this decision entails.  Many homeowners agree to pay a higher deductible to save money on their premium, only to find that they can’t actually afford to pay their deductible when disaster strikes.  Agreeing to pay a higher deductible than you can afford means you might not receive coverage when you need it.

On the flip side, many homeowners decide on a lower deductible to ensure that they can afford coverage should they need it.  However, if these homeowners consistently avoid filing a claim, they might find themselves losing money by paying their high premium costs.

Ultimately, when choosing the right deductible for you, it’s important to look at your finances and determine what you can afford to pay comfortably.  Please remember that how your deductible affects your premium differs depending on state and local regulations, and by individual insurance company.  To learn more and to get help choosing the right home insurance deductible for you, contact the friendly team at Desert Empire Insurance.