A deductible is the amount of money a person is required to pay before an insurance policy takes effect. For example, if someone has a $2,000 deductible on his or her home insurance, he or she is responsible for the first $2,000 before the insurance company takes care of the rest in case of an accident or damage from a listed threat. The importance of choosing the right deductible can’t be overemphasized. Each policy has a deductible, and any person purchasing homeowners insurance must choose the amount of his or her deductible.
Generally speaking, there are two types of deductibles—a percentage-based amount and a dollar-based amount. The difference between the two comes from how the deductible is calculated. There are several factors that often come into play depending on the valuation of the house. The following are some of the ways to choose the right deductible.
Pay a Reasonably High Deductible
First and foremost, it’s important to note your home insurance deductible should be as high as you can comfortably afford. The higher your deductible, the higher the chances your homeowners insurance premium will be reduced up to 20 percent. However, this isn’t a license to raise your deductible unreasonably.
Limit Your Claims
This is one of the smartest ways to avoid paying a deductible. However, this doesn’t mean you should abandon claims for damage. It instead implies there are certain preventive steps you can take as a homeowner to reduce the risk of damage that results from poor maintenance or the absence of adequate safety measures.
Perform Proactive Home Maintenance
Ensuring your home is well maintained throughout the year can play a big role in avoiding claims and paying deductibles. Some simple maintenance measures you can take include caulking windows, inspecting the roof, and monitoring drainage pipes.
The home maintenance requirements for every season are different. For instance, during spring, inspect your HVAC systems, check fire extinguishers, and clear out gutters, among other things. During winter and fall, you may want to clean your kitchen exhaust hood and insulate the furnace.
File Claims Wisely
Only file a claim when it’s necessary. Claims not only increase insurance premiums but may also make the insurance company categorize you as a high-risk homeowner, which could cause your rates to rise dramatically.
Hire a Proactive Insurance Advisor
An experienced, proactive insurance advisor will ensure your deductible and insurance premiums boost your financial stability. For example, the advisor will be able to present you with available options that can aid in reducing your insurance premiums. For example, he or she may recommend installing leak detection technology in your house.
For more information on choosing homeowners insurance that suits your needs, call on the experienced agents at Altra Insurance Services. In addition to homeowners coverage, we offer a variety of reliable insurance products, including business, renters, and auto insurance. San Diego residents are encouraged to call us today at 619-474-6666 to learn more about our high-quality service and affordable coverage.