Which Home Insurance Deductible is Right for You?

Which Home Deductible Is Right For You?

In an effort to save money, many homeowners secure insurance with high deductibles. What is a deductible? A deductible is the amount that you will pay after filing a claim on your policy. In the event that you had a home fire, and your deductible is set at $1000, you would be required to pay that amount up front before the insurance company honors the claim.

What is the right deductible for you? Most insurance companies begin issuing discounts at the $500 level. As you increase your deductible your discount will also rise. Many companies will permit deductibles as high as $10,000. However, you should check with your mortgage lender since many will not allow deductibles over $1000. Obviously, in the event of a claim you will pay more out of pocket. However, with your month to month savings it may prove to be a worthwhile risk. Raising your home insurance deductible will save you money. However, your savings could be offset in the event of a claim.

Your decision regarding your deductible is something that you should weigh carefully. Yes, there is a trade off. However, your savings will only last as long as you don’t excessively file claims. It may be best to accept that you will have to cover minor damages without filing a claim. Keep in mind that the more claims that you file it’s probable that your monthly premium will increase.

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