House Insurance Deductible

The deductible is the amount of money that you have to pay on a claim before an insurance policy starts reimbursing you. This is one of the most important things to discuss when getting an insurance quote.

Determining the level of the deductible is usually one of the most important aspects of buying insurance since the deductible often determines the cost of the policy. A policy with a lower deductible will cost more because you will be more likely to make claims on it. A policy with a higher deductible is usually cheaper because you will be less likely to make claims against it.

You should definitely sit down and spend time figuring out what deductible you can afford before you buy a policy. That way you can get the most affordable insurance that will still meet your needs.

How to Determine the Level of the Deductible
The way to determine the level of the house insurance deductible is to sit down and figure out how much additional money you have available for emergency situations. Look over your income, your savings, and investments and see how much money you can access quickly for items such as home repairs.

If you can quickly get your hands on several hundred extra dollars, you can probably live with a higher deductible. That way you can reduce your house insurance payment. Something to consider is raising your deductible and putting the funds you save into a savings or money market account.

Another resource that some people use is an emergency credit card. They keep a second credit card around the house and use it to cover emergency expenses, such as small repairs. Something to keep in mind is that you will have to pay the credit card back with interest and frequently pay an annual fee to use the credit card.

Make Sure Your Deductible Matches Your Income
A big mistake that many people make is to not adjust their deductible to match their income level.

If your family’s income falls it might be a good idea to consider lowering your deductible, that way house insurance will cover the cost of more repairs in emergencies. It might also be a good idea to raise your deductible if your income increases and you have more money available to cover emergency costs.

This means that you should review your insurance deductible about once a year to see if it still meets your needs. You should also review your deductible whenever your financial situation changes.

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