How To Choose Your Deductible

When choosing your home owner's deductible there are several things you should consider. First, surprisingly, is your credit score. If your credit score is poor, you can expect your insurance premiums to be high. In this case you will benefit from choosing a higher deductible to lower the premium cost, at least until you get your credit straightened out.

Decide on Premium

Next, decide how much you can afford to pay for your premium. This can help you determine how much deductible you can truly afford. It might be a good idea to choose a deductible that is high enough to make the monthly payments affordable.

You want to be able to put away the amount of your deductible in an emergency fund. Leave this money alone, unless you need it for your deductible. This will free you up to have a higher deductible, because you know the money will be there if you need it. Never choose a deductible that will be out of reach, because your insurance company will not pay a dime until you meet your deductible, and this could cause you to be homeless because you cannot afford the costly repairs after an accident or natural disaster.

Watch the fine Print

If you can; avoid percentage based deductibles. Read any offerings carefully so you know exactly what you are getting yourself into. Percentage based deductibles are going to be costly on major events. A low percentage rate adds up when applied to a $50,000 or more claim! These types of deductibles are almost always a bad idea! Try to get a fixed deductible if at all possible, even if it means slightly higher premiums.

So, look at your home owners policy and decide the answer to this question: is my home owner insurance deductible right for me? It is crucial for the deductible home insurance owner to evaluate their ability to pay the deductible. If you need to, shop for a new policy that is affordable in premium and deductible amounts!