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Payments on Deductibles Can Lead to Surprise Savings on Homeowners Insurance

brokerSome might be quite surprised to discover that homeowners insurance policies will come with a deductible. For those not familiar with the term, a deductible would is the amount not covered by the insurance company. Usually, this would be a set first dollar amount on the payment. For example, if the deductible is $250, and $275 dollars of damage is done to a home, the insurance company will only pay $25. This might seem outrageous, but once the $250 deductible has been paid, then the remaining amount claimed to the insurance company will be covered. So, if another claim is made for $1,500, then there will be no requirement for a deductible to be paid.

More realistically, damage to a home will be much more costly, so with a $3,000 claim and a $250 deductible, the insurance company will pay out $2,750 and the homeowners would only have to pay the aforementioned $250.

Since the likelihood that damage will befall a home, many will opt to accept a much higher deductible of upwards of $1,000 and pay a much lower monthly premium. This can be the better and more economic option many will find more appealing.

Posted by Jessie Milam on June 6th, 2013 :: Filed under Homeowners Insurance Information
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