There are various deductibles in homeowner policies. The higher the chosen amount of the deductible, often between $100 and $1,000 or more in a typical homeowner policy, the lower the premium you should be paying. The amount you choose as your deductible is what you as a homeowner will absorb in the event of a covered loss. Once the amount of a covered loss is determined, the insurance carrier responds by paying the claim less the homeowner deductible.
Generally you choose the amount of your deductible by determining the highest amount you are willing to pay on your own in the event of a covered loss. How much risk can you afford to hold? Toward determining this, it is important to remember that you do not want to be submitting claims for small losses. A poor loss history will work against you in the long run. So, use that as another determining factor in the amount of your chosen deductible.
Always ask your independent agent to help you with this process.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
When a claim occurs the adjuster arrives at a proposed settlement. If you agree with the amount then the claim is settled. The company will pay you the settlement minus the deductible unless the claim involved liability. Liability claims are generally handled without any deductible. The deductible can generally be used to reduce your income tax liability.
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Generally you choose the amount of your deductible by determining the highest amount you are willing to pay on your own in the event of a covered loss. How much risk can you afford to hold? Toward determining this, it is important to remember that you do not want to be submitting claims for small losses. A poor loss history will work against you in the long run. So, use that as another determining factor in the amount of your chosen deductible.
Always ask your independent agent to help you with this process.