Wednesday, May 11, 2011

Is it time to give your home insurance deductible a raise?

Do you know the amount of your home insurance deductible? Many people don’t. That’s too bad, because giving this figure a little thought could add up to some big savings on your insurance premium.

People generally don’t think about, nor even care how the deductible works – until there’s a potential claim. I learned about deductibles first-hand, long before I got into the insurance business. A windstorm blew four shutters (those cheap, plastic, glue-on contractor-grade ones) off the front of my house. I naively thought, “I’ll call my insurance company, and get those paid for.” I figured those shutters were worth $100, and what else was insurance for? Well, after a call to my agent, I learned that I had a $500 deductible, which meant I was responsible for that first $500 toward paying for the shutters. It didn’t take long to see that insurance wouldn’t be involved in replacing those shutters. Actually, I never did replace them – never liked ‘em anyhow!

After I realized that home insurance wasn’t for little stuff like my shutters, I soon then figured out that lower isn’t always better in deductible-land. Raising your deductible to get a better rate is often a smart move, particularly if you’ve recently had a new roof installed. Lately, repairing or replacing roofs has been a very common occurrence here in Franklin, Brentwood, Spring Hill, Murfreesboro, and the rest of Middle Tennessee. If you have a newer roof, you’re highly unlikely to need it repaired or replaced for many years, so, “without” this possibility, your chances of needing to file an insurance claim for “other things” is dramatically lessened.

That’s why I suggest you at least consider raising your home insurance deductible in order to lower your premium. You can bank the savings. That way, in the unlikely event of a claim, you’ll have money available to pay the higher deductible. I’d rather have this money in my control, rather than give it to the insurance company in the hopes it “might” pay off for me down the road.

Home insurance is really for catastrophes, like a tornado blowing your home away, or a fire burning it to the ground. If that happens, you won’t much care  whether your deductible is $500 or $2,500! Be sure you review the pros and cons of changing your deductible with your agent before deciding.

Also, if you want to discuss changing deductibles or anything relating to insurance, my door is always open…


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