What you need to know about selecting a home deductible.

When looking at insurance quotes our eyes automatically drift to the bottom line premium quoted. But what about all the stuff above it? Not all home quotes and/or policies are created equal. One of the key parts of a home quote and/or policy is the deductible. Below is a list of things to keep in mind as you consider a home quote and/or policy.

  • Some deductibles are flat and some deductibles are percentages. Percentages are typically used in coastal areas where there is a higher probability of wind, hurricane, etc. A percentage deductible is based on the dwelling value listed in the policy. If the dwelling value increases the deductible increases as well.
  • Some deductibles are specific to a type of coverage; Water Back-Up, Water Damage, Hurricane, Tropical Cyclone, Named Storm, Wind/Hail, etc. You may also see the term All Other Peril which means where a specific deductible is not identified the All Other Peril deductible applies.
  • A home policy can have multiple deductibles which can be a problem if a claim triggers more than one deductible. Understanding how each deductible applies at the time of a claim is important.
  • Some deductibles are dictated or required by the insurance company. This decision can be based on where the home is located, such as coastal. One insurance company may require a higher deductible than another insurance company.
  • Some home policies waive the deductible for large claims or a total loss claim. Knowing when a deductible waiver applies is important. This can be beneficial in deciding on a high deductible.
  • Some companies offer a reducing deductible if you remain claim free.

It is important when you are reviewing a home quote that you be aware of the deductibles. While a high deductible will reduce the policy premium, a high deductible can be detrimental if you can not afford the deductible at the time of a claim or the losses that occur are below the deductible. An insurance agent can help you review all the deductibles applicable to a quote and/or policy. An agent can also help you select a deductible that fits your financial situation while providing you the most advantageous premium.

National Insurance Awareness Day, June 28th

This Friday, June 28th is National Insurance Awareness. The day was created to encourage everyone across the nation to review their insurance policies.

Below are some tips to help you observe the day:

Home:

  • Review the home value. The value of the home should be based on current construction costs, not market value. You should review the home value every 3 to 5 years.
    • Review the home credits. If you have installed an alarm or have turned your alarm service off you should update the home policy accordingly.
    • Review the deductible. The higher the deductible the lower the premium. Also a higher deductible will discourage you from filing small claims which can impact your ability to obtain coverage in the future.
    • Review the endorsements included in the policy. If you have switched insurance companies recently a coverage may have been dropped during the process.

Auto:

  • Review drivers listed on the policy. All licensed drivers residing in your home should be listed on the auto policy. Failure to do so could result in a denied claim for unlisted drivers.
    • Review ownership of the vehicle. If the loan or lease agreement has been satisfied update the policy. This will prevent delays in payment at claim time. Any change in titled ownership should also be reflected on the policy or a new policy purchased for the vehicle.
    • Review deductibles. Insurance companies continually increase the price breaks for higher deductibles. As with the home insurance a higher deductible will save you premium and discourage you from filing small claims.
    • Review usage of each vehicle. Vehicles used for Uber or Lyft services do not have coverage while being used for this purpose. Vehicles used for business purposes may also not have coverage if used for business at the time of a claim.

Schedule:

  • Update items to be listed along with values. Appraisals should be completed every 3 to 5 years to keep up with market values. Use an inventory such as Collectify to manage your collection easily.

Umbrella:

  • Update properties, vehicles, drivers, recreational vehicles, boats, etc. at each renewal. Failure to update could result in no coverage under the umbrella.
  • Make sure the underlying insurance policies for each of the above meets the minimum liability requirements to avoid a coverage gap.
  • If you do not have coverage for the underlying insurance policy for each of the above obtain it at your earliest convenience.

With the help of a Trusted Insurance Advisors they can help you review your policies at any time, not just this Friday or at renewal. A Trusted Insurance Advisor is there to help you every step of the way. Call your agent today!