How to Choose the Best Home Insurance Deductible

There are multiple decisions for homeowners when selecting and purchasing home insurance. Homeowners must choose their policy’s deductible in addition to the coverages, limitations, and endorsements they want.

The majority of insurance companies give policyholders a variety of deductible options. It’s crucial to choose wisely because the decisions you make and the deductible you select will directly affect your premium. Understanding how deductibles work will help you make the most of your money.

What is a Home Insurance Deductible?

Your deductible is the sum that you and your insurance company agree that you will pay when you file a claim. Your home insurer pays the remaining claim amount up to the limit of your policy after your deductible has been reached.

Your home insurance company will take the deductible amount from the total claim settlement it offers you. The amount of your home insurance deductible might be either a fixed financial sum or a percentage of the cost of your policy. The deductible is fixed for the duration of your home insurance coverage once it is chosen.

Types of Home Insurance Deductibles

There are two types of home insurance deductibles, a dollar-amount deductible, and a percentage deductible.

A flat deductible is another name for a dollar-amount deductible. Every time you make a claim under your house insurance, you must pay a set fee. Average house insurance deductibles range between $500 and $1,500.

A percentage deductible is calculated using a portion of the insured value of your home. If you have a 1% deductible and a $500,000 house insurance policy, the reimbursement for any home claims will be $5,000 less. Compared to what you would have to pay with a dollar-amount deductible, this is more expensive.

How Do I Pick the Right Home Insurance Deductible?

Many homeowners consider the monthly premium amount added to their mortgage payment when deciding which insurance deductible to choose for a policy.

Homeowners may want to reduce their monthly premium payments, and choosing a higher deductible can help do this. Consider a large deductible as a one-time investment in your future finances.

Normally, it’s a good idea to choose a deductible that you will be able to afford should you need to submit a claim, but there can be benefits to picking the highest deductible you can manage. Higher deductible choices typically result in reduced monthly prices for house insurance policies. A greater deductible will lessen your likelihood of making a little claim, which could prevent you from receiving a discount or raise your premiums.

When selecting a deductible for your home insurance policy, there are a few questions to consider:

• If you had a claim, how much could you afford to pay out-of-pocket?
• How affordable do you want your homeowner’s insurance premium to be?
• If you don’t submit a claim, are you eligible for a discount?
• Will making a claim result in higher premiums?

Choose the Best Homeowner’s Insurance and Deductible for Your Needs

Having the right insurance policy with a deductible you can live with is important for homeowners when navigating the many curves life can throw at you at a moment’s notice.

At GWK Insurance, we understand that shopping for the best policy that meets your unique needs and budget can be challenging. We’ll help you find the best homeowner’s insurance policy that checks all the right boxes for you. Contact us today to learn how we can help you.