What is a Home Insurance Deductible? – Deductibles. You’ve probably seen this word thrown around in insurance, and it’s an important part of how it all works. So today we’re going to be breaking down what a deductible is, how they work and what options are really going to best suit you. So by the end of this video, you won’t feel like you’re reading hieroglyphics when you open up your insurance policy. So let’s dive in.
What is a Home Insurance Deductible?
Every insurance policy contains a standard deductible which will apply to all the claims that you make. So when you’re purchasing a policy, you have the opportunity to choose from several options. And these generally range from five hundred to five thousand dollars.
So, for example, if you have a policy that has a thousand dollar standard deductible and you suffer fifty thousand dollars of damage in a kitchen fire, you will be responsible for paying that first one thousand dollars, then your insurance provider will cover the remaining forty-nine thousand dollars in damages. Other insurance providers don’t usually let you choose your deductibles and coverage limits, but with Square One, you’re able to customize your policy to choose your own limits and deductibles.
So depending on your home insurance provider, your policy will contain several types of deductibles that will apply to specific causes of loss. So here’s a breakdown of the most common deductibles you’ll see. This type of deductible applies to claims resulting from vandalism, mysterious disappearance, burglary and theft. This deductible often applies to rental and vacation properties, which are usually more vulnerable to crime because you aren’t around the property as often. Crime deductibles usually range anywhere from twenty-five hundred dollars up to ten thousand dollars.
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Assuming you purchased earthquake insurance, this deductible would apply to claims resulting from loss or damage caused directly by an earthquake. Quite straightforward. Since an earthquake could cause catastrophic losses across an entire region, deductible options usually range anywhere from twenty-five hundred dollars up to two hundred thousand dollars. The glass breakage deductible applies to claims relating to glass that forms the part of your home, you can actually eliminate this deductible for a small increase in your premiums.
This deductible applies to claims resulting from an inland flood. Generally, inland floods are freshwater floods that could be caused by an overflowing river, snowmelt, or heavy rains and can actually cause things like a sewer backup. Options for this deductible usually range anywhere from twenty-five hundred dollars up to twenty-five thousand dollars.
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This one is straightforward and it applies to claims directly resulting from hailstorms, this deductible will usually apply to areas that have a higher than normal risk of hailstorms and will usually come set at a 5,000 dollar limit. When deciding upon your policy deductibles, keep in mind that a higher deductible usually will reduce your policy’s annual premium.
This is because higher deductibles reduce the likelihood of frequent and small claims. Avoiding frequent small claims is also helpful to you in the long term, as making a claim may eliminate any claims-free discounts that you currently enjoy on your policy.
Frequent claims can also result in future surcharges or even the loss of your coverage, reducing or even eliminating any benefit received from making the small claim. So, you can pay a lower premium if you want to choose a higher deductible. And if you want a lower deductible, you can pay a higher premium.
And if you want to see how changing your deductibles can save you money on home insurance, you can do this for free over at squareoneinsurance.com in less than five minutes. Thank you for read and I hope you found this helpful..