How Do I Choose the Right Home Insurance Deductible?

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Home Insurance Oakley CAWhen selecting your deductible, be sure to know what you’re signing yourself up to.

Homeowners know that their insurance policy is designed to protect their house and belongings throughout perils and lengthy lawsuits. However, when deciding on a policy, it’s important to understand what the deductible means for you policy.

What is a deductible?
Within your homeowners’ insurance is a deductible. This is the total amount “deducted” from an insured loss. When filing a claim to repair your home or replace your personal belongings, the deductible would come out of your pocket.

There are typically two choices of deductible types:

  • Dollar-amount: For example, $500 “dollar deductible”. If your claim was for $10,000, your insurance company would take care of $9,500 while you paid the remaining $500.
  • Percentage based: This is based on a percentage of your home’s insured value. If your home is insured for $100,000 and your insurance policy has a 2 percent deductible, $2,000 would be deducted from the amount you are reimbursed on a claim. For example, if the insurance loss is $10,000, you would be paid $8,000.

What else should I keep in mind?
When selecting a deductible, you’re balancing the short-term cost that you can afford (your deductible) and the long-term cost of your policy (your premiums). While a higher deductible will often mean lower monthly premiums, you should first consider if you can afford the high out-of-pocket deductible cost, should you file a claim!

To determine the best home insurance policy for your needs and budget, contact the industry experts at Agers Insurance Services! We serve Oakley and Northern California with quality insurance services – contact us today to get started.