Understand Home Insurance Deductible and How It Affects your Premium

Nobody pays insurance bills with a smile. They are expensive and not likely to pay off unless something bad happens. It isn’t any different with home insurance where you don’t get a cent back unless something in your house is damaged or lost.

It is no wonder many people look for ways to reduce home insurance costs.

One of the most common strategies you will find from research regarding cutting home insurance costs is to increase your deductible.

What is an insurance deductible? Is it important when buying home insurance?

Why the amount of your deductible Matters

We’ll explain the basics of home insurance deductibles so you can better protect your home and your finances.

Your deductible is the amount that you pay in case you file a home insurance claim. For example, if your deductible is $500, you shoulder $500 out of every claim you make on your home insurance.

When buying home insurance, choose a deductible that is high enough yet remain affordable to you in case you make a claim.  A higher deductible lowers your insurance premium by as much as 20% but don’t make your deductible too high.  Insurers like it when you have a higher deductible because you assume more responsibility and reduce their administrative costs.

How your Home Insurance Deductible Works when You File a Claim

Ordinarily, a homeowner will shoulder damages or loss that is within the amount of the deductible.  If your deductible is $500, you won’t file a claim on your home insurance for amounts that are within this range, give or take.

If your roof incurs damage from a fallen tree amounting to $2,000, your insurer will pay out $1500 for the damage.  If you file two claims within a policy term, you need to pay the same deductible amount for the second claim, too.  Your deductible applies for every claim you make.

The only time you will pay only one deductible for 2 incidents of loss or damage is when the two are caused by the same event or are related.  They would also occur within a reasonably close time frame.

Insurers determine the cause of loss and damage and they are very good at it.  If it can be proven that the incidents were one and the same rather than two separate events, your insurer may consider only one deductible.

Deductibles Apply to Personal Property but Not on Liability Claims

Deductibles normally apply to claims for damage to dwelling, other structures on the property, and to personal property.  It works the same way for claims on losses due to theft.  If your house is broken into and you file a claim for your personal property, your insurer will reimburse you or replace your items minus your deductible.

No deductible is generally applied to liability claims on home insurance.

Determining the Right Deductible

When you obtain home insurance, you are buying protection against unforeseen risks related to your home that could hurt you financially.  While the insurance company is happy to insure these risks, it will also ask you how much you are willing to pay in part for any loss or damage?

Basically, this is the question you need to ask yourself when determining the amount of your deductible.

Low or High Deductible, which is better?

When you have a higher deductible, you get to save on home insurance costs.  It is a mistake to choose a low deductible because you’ll be paying for higher premiums and you may not even have to file a claim until many years later.

In determining the amount of your deductible, you must be sure that you have access to that amount in case something happens.

If you are wondering whether to make your deductible $500, $1,000, or $2,000, it depends on what figure you feel comfortable with.  In determining the amount of your deductible, you must be sure that you have access to that amount in case something happens.

You can also talk an insurance broker or agent for advice on the right amount of your deductible.  Learn more with answers to questions about home insurance  you may be afraid to ask.

Ways to Save on Home Insurance Premiums

If you are shopping for cheaper home insurance, below are some tips on how to save on your premiums.

• ✓ If you are currently looking to buy a home, choose a newer home
• ✓ Get a professionally monitored home security system to qualify for a discount by as much as 20%
• ✓ Combine your home and auto insurance under one insurer
• ✓ Qualify for lower premiums if you are claims-free
• ✓ Non-smokers may also qualify for a lower premium

If you already have home insurance and you are looking for a better deal, get a home insurance quote online to lower your premiums.

Avoid Mistakes in Insurance Claims

The biggest mistake any homeowner makes mistakes when filing an insurance claim is to fail to understand the real purpose of home insurance.

Although you will find that your home insurance covers even minor expenses like key replacement, it is really intended as financial protection for major damage or loss.

Find out what happens when you file a claim from your home insurance why it isn’t always in your best interest to file a claim.

Another mistake that many homeowners make is not communicating with the insurance company when something happens.  Don’t waste any time because the insurer would want to assess and investigate the damage immediately.  Your policy may also require you to file a claim within a certain period of time after damage or loss.

Every successful home insurance claim relies on accurate documentation. Keep receipts of valuables, take photos of your home and keep them. These will come in handy when you need to show proof of the condition of your home or your personal property before the damage.

By avoiding these common mistakes, you can feel more confident that your home insurance claim is processed smoothly.

Home Insurance Coverage that is Perfect for your Needs

You take pride in your home. It is full of possessions you hold dear, not to mention memories you’ll make throughout your lifetime.  Regardless if you live in a condo or a house, you need home insurance coverage that is perfect for your needs.

There is no one-size-fits-all solution to home insurance because every home is unique.  When you buy home insurance, your insurance company will calculate the price of your insurance premiums by taking into account several important criteria:

• ✓ The type and level of home insurance coverage you desire
• ✓ The amount of your deductible
• ✓ The age, location, and condition of your home
• ✓ The cost to rebuild it

Other factors may be taken into consideration by your insurer, such as the type of heating you use.

You can save time, effort and money in looking for the perfect home insurance with a free home insurance quote.

Fill-out our online form to receive your quote from one of our partners (insurance brokers and insurers).

Get Home Insurance Advice from Qualified Insurance Brokers and Agents

Your home is important to you. Naturally, you want to make sure you are getting the right home insurance.

It isn’t easy to find the best home insurance because each policy is different and costs also vary from one insurer to another.  You may also have questions about coverage, the deductible, and type of insurance for your home.

You can get valuable advice about home insurance needs from one of our partners (qualified insurance brokers and agents).

You can request your very own free home insurance quote and our partner will compare policies, coverage, and cost of premiums with 1 quick form.

Take advantage of our free home insurance form and save time.