Here’s what you need to know about insurance deductibles.
Whether you are looking at your homeowners, auto, or health insurance, you are bound to see the term “deductible” popping up in all of your policies. But what exactly is a deductible and what does it mean in terms of your insurance? Here’s everything that you need to know about insurance deductibles.
What is it?
A deductible is the amount of money you agree to pay out-of-pocket towards an insurance claim before your coverage kicks in. Generally, your insurer will provide a range of deductibles to choose from and you will pick the amount that you can comfortably afford. It’s also important to understand that your insurance deductibles and premiums have an inverse relationship. This means that the higher the deductible you assume, the lower your premiums will be and vice versa.
Why does your deductible amount matter?
If you ever need to file a claim, you need to have your deductible amount ready before your insurer will step in and cover the remaining cost of the claim (up to your policy’s coverage limits). This is why it’s important to set a deductible amount that you can actually afford. If you set your deductible amount too high, you risk not being able to access your coverage when you need it the most.
Can I adjust my deductibles?
With most auto and home insurance companies, you have the ability to change your deductibles whenever you need to. However, there are some exceptions. For instance, if you live in an area prone to certain natural disasters, you might be required to pay a specific percentage deductible rather than the normal dollar deductible. Percentage deductibles may not be changeable because they are based on a percentage of your policy’s coverage limits.
Here’s everything you need to know about insurance deductibles. Do you have more questions regarding your insurance? Then turn to the experts at Stromsoe Insurance Agency in Murrieta, California. We are ready to assist you with all your insurance needs. Contact us to get started today.