Your Homeowners Insurance Deductible Amount
How much of a homeowners insurance deductible do you need on your policy? What's the relationship between the premium and the deductible? Should you increase the deductible to lower your monthly payments, or is that risky?
These are some of the most common questions homeowners have on the subject of home insurance. It's easy to understand why, because this policy is going to cover one of your most prized possessions. So you want to ensure you have the right kind of coverage. At the same time, you don't want to overpay for your homeowners insurance, through the deductible or the premium.
Here's what you need to know about homeowners insurance deductibles and how they affect you. These are just some of the basic facts on this subject. Later, I'll give you may own recommendation on how to handle deductibles, premiums, and other aspects of your home insurance policy. Let's start with some basic terminology, for those who are new to this subject:
This last point is where there's a difference of opinion among real estate and insurance experts. However, most people seem to recommend increasing the homeowners insurance deductible amount in order to lower your monthly premium. The logic is that you know you'll have to pay the premium each month, but there's only a small chance you'll ever have to pay the deductible (in the event of fire, flooding, theft, etc.).
Clark Howard, America's "money saving expert," recommends that you raise your home insurance deductible to $1,000 or $2,500. There many other people who suggest the same thing, and I fall into this camp as well.
It's also worth noting that you may have other deductibles on your policy, depending on where you live. You might have a separate deductible for living in an earthquake-prone area, for example, or a place that gets a lot of wind damage from hurricanes. You'll have to ask your insurance provider about these.
I hope this article helps you understand the relationship between homeowners insurance deductibles and premiums. If you'd like to get a quote for such a policy, use the box provided at the top of this website.
These are some of the most common questions homeowners have on the subject of home insurance. It's easy to understand why, because this policy is going to cover one of your most prized possessions. So you want to ensure you have the right kind of coverage. At the same time, you don't want to overpay for your homeowners insurance, through the deductible or the premium.
What to Know About Insurance Deductibles
Here's what you need to know about homeowners insurance deductibles and how they affect you. These are just some of the basic facts on this subject. Later, I'll give you may own recommendation on how to handle deductibles, premiums, and other aspects of your home insurance policy. Let's start with some basic terminology, for those who are new to this subject:
- The deductible is the amount you pay in the event of a claim, before the insurer will make any payments. For example, if you make a claim on your homeowners insurance policy to cover fire damage, and your deductible is $1,000, you must pay that $1,000 before your insurer will pay the rest.
- The premium is what you pay each month for your policy coverage.
- In most cases, these two components (the deductible and the premium) have an inverse relationship. In other words, when you raise your insurance deductible it lowers your monthly premium.
- Most insurance companies these days suggest a minimum deductible of $500 for home insurance policies.
- By increasing the deductible (the amount you would pay toward a loss), you could save money on the premium you pay each month.
This last point is where there's a difference of opinion among real estate and insurance experts. However, most people seem to recommend increasing the homeowners insurance deductible amount in order to lower your monthly premium. The logic is that you know you'll have to pay the premium each month, but there's only a small chance you'll ever have to pay the deductible (in the event of fire, flooding, theft, etc.).
Clark Howard, America's "money saving expert," recommends that you raise your home insurance deductible to $1,000 or $2,500. There many other people who suggest the same thing, and I fall into this camp as well.
It's also worth noting that you may have other deductibles on your policy, depending on where you live. You might have a separate deductible for living in an earthquake-prone area, for example, or a place that gets a lot of wind damage from hurricanes. You'll have to ask your insurance provider about these.
I hope this article helps you understand the relationship between homeowners insurance deductibles and premiums. If you'd like to get a quote for such a policy, use the box provided at the top of this website.
Labels: home
posted by Brandon at
2:09 PM
