"This policy contains a clause which may limit the amount payable." Have you ever wondered what this means? You'll see it on the front page of most home insurance policies.
This refers to your deductible. In the majority of policies, a deductible is paid by the policy holder when a loss is incurred. The deductible amount may differ based on the type of loss you experience. Before the insurance company pays for a loss, the deductible must be paid by the policy holder. The premium is proportionally lower when the policy is larger.
A policy may have different deductibles based on the peril of the loss. Typically, the majority of deductible types are:
Glass breakage deductible: Applies to claims relating to glass that forms part of your house. Typically, you can eliminate this deductible for a small additional premium.
Earthquake deductible: Applies to claims resulting from an earthquake. There are usually varying kinds of deductibles that can be chosen in case of earthquake damage. A percentage of the total property covered by the insurance plan is calculated, and the home owner can choose from these.
Crime deductibles cover theft, vandalism, burglary, and mysterious disappearance claims. In most cases this deductible is something that is only for vacation and rental property. Generally there are $5,000 and $10,000 deductible options.
Water deductibles are for water related damage claims, and these are generally for rentals and vacation homes. Generally it's $2,500 or $5,000 for the deductible amount options.
Standard policy deductibles are for to cover other kinds of claims that we have not covered here. In most cases they range from $500 to $5,000, depending on the policy holder's requirements.
Deductibles help keep your premiums down because they prevent payments being made on very small losses. This significantly reduces an insurance company's costs, thereby helping to keep everyone's premium down.
When a deductible is very small, a policy holder could attempt to claim losses that are minimal. The "claims free discount" will likely be eliminated if these small claims are made. Also, after a few small claims, you'll likely see your base rate go up, possibly costing you more than it would have cost to replace the small items yourself. Home owners who make claims too often sometimes find the insurance company refusing to renew their insurance.
The amount saved in premiums is quite high when a home owner decides to have a higher deductible on their policy. Small losses may not be covered, but you're really buying insurance to protect yourself from a catastrophic loss, such as earthquake, fire, windstorm damage, water damage, and break-ins. Because of this, having a higher deductible is recommended. Repairing or replacing a minimal loss by yourself will keep your premiums as low as possible, and in the long run you will save money. If a time comes when insurance will be needed, your policy will have you covered.
This refers to your deductible. In the majority of policies, a deductible is paid by the policy holder when a loss is incurred. The deductible amount may differ based on the type of loss you experience. Before the insurance company pays for a loss, the deductible must be paid by the policy holder. The premium is proportionally lower when the policy is larger.
A policy may have different deductibles based on the peril of the loss. Typically, the majority of deductible types are:
Glass breakage deductible: Applies to claims relating to glass that forms part of your house. Typically, you can eliminate this deductible for a small additional premium.
Earthquake deductible: Applies to claims resulting from an earthquake. There are usually varying kinds of deductibles that can be chosen in case of earthquake damage. A percentage of the total property covered by the insurance plan is calculated, and the home owner can choose from these.
Crime deductibles cover theft, vandalism, burglary, and mysterious disappearance claims. In most cases this deductible is something that is only for vacation and rental property. Generally there are $5,000 and $10,000 deductible options.
Water deductibles are for water related damage claims, and these are generally for rentals and vacation homes. Generally it's $2,500 or $5,000 for the deductible amount options.
Standard policy deductibles are for to cover other kinds of claims that we have not covered here. In most cases they range from $500 to $5,000, depending on the policy holder's requirements.
Deductibles help keep your premiums down because they prevent payments being made on very small losses. This significantly reduces an insurance company's costs, thereby helping to keep everyone's premium down.
When a deductible is very small, a policy holder could attempt to claim losses that are minimal. The "claims free discount" will likely be eliminated if these small claims are made. Also, after a few small claims, you'll likely see your base rate go up, possibly costing you more than it would have cost to replace the small items yourself. Home owners who make claims too often sometimes find the insurance company refusing to renew their insurance.
The amount saved in premiums is quite high when a home owner decides to have a higher deductible on their policy. Small losses may not be covered, but you're really buying insurance to protect yourself from a catastrophic loss, such as earthquake, fire, windstorm damage, water damage, and break-ins. Because of this, having a higher deductible is recommended. Repairing or replacing a minimal loss by yourself will keep your premiums as low as possible, and in the long run you will save money. If a time comes when insurance will be needed, your policy will have you covered.
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