At a time when people are looking to cut back and save some money it can be tempting to reduce things like insurance premiums by cutting coverage or shopping around for a new policy. Reducing your coverage or going with a less reputable company can seem like a good idea, until you need your insurance and find it lacking. One possible way to save money and keep a good policy is by taking a look at your deductible.
Deductibles are an important part of your insurance policy. Understanding deductibles and making sure you have the best one for your needs can save you hundreds of dollars, upfront and/or down the line when putting in a claim.
What is a deductible
Simply put a deductible is the amount of money the policy holder is responsible for paying towards an insurance loss. In the case of an accident or loss to your home or business the amount of the deductible will be subtracted from the settlement amount that the insurance company pays out. For example, if you have a $500 deductible and you are in an at fault accident with a total loss of $9,000 you will receive a claims check for $8,500.
If you are found less than 50% at fault for an auto accident you will not be subject to your deductible, although in some situations you may have to wait until the claim is settled to be paid back for it.
How your deductible impacts your policy premium.
Most deductibles are between $500-$2000 although some may be higher. The higher your deductible is the lower your premium will generally be. This is because you are taking more of the responsibility on yourself. Increasing your deductible can be a great way to save money, but only if you will be financially comfortable paying more money out of pocket in the case of a claim.
Deductible options can vary depending on your situation, as well as the savings amount. For information pertaining to your exact policy please call our customer service representatives.