Not everyone knows the ins and outs of insurance; so if you are wondering how your insurance deductibles work, that’s ok, we are going to explain that in this post.
What is a deductible?
An insurance deductible is the amount you, the insured, pay before any claim is paid by your insurance carrier. Depending on the type of insurance, a policy may set the amount of deductible, or offer you the ability to select a deductible amount. An example of this would be if you have a loan or lease your vehicle. The loan company or leasing company may require you to carrier a certain deductible on your comprehensive and collision coverage.
Deductibles serve a dual purpose; they save the insurance company money (including the administrative cost of processing small claims) and may help keep your premium costs lower.
How to Choose the Right Deductible Amount
The trade-off between deductible levels and insurance premiums is simple: The higher the deductible, the lower the cost of insurance. Conversely, the lower the deductible, the higher the cost of insurance.
Only you can decide if saving $65 a year in premiums for a deductible that is $500 rather than $250 is worth it to you. [1] You may find that the relationship between deductible amount and premium cost is different depending upon the type of insurance. For example, the savings with a higher deductible may be significant with auto insurance, but much less so with homeowners insurance.
Not only with this relationship between deductibles and premiums differ based on insurance type, but it may differ based upon your age and value of your car.
When you consider the appropriate deductible level for health insurance coverage, remember that deductibles may be on each member of the family.
Contact R.C. Keller & Company
When you are shopping for insurance, always ask your local insurance agent at R.C. Keller & Company, what the premium cost is at each deductible level. Knowing this information may help you make your decision on what kind of coverage you are looking for.
R.C. Keller & Company has been serving the Schaumburg community since 1910. We are an independent insurance agency, so we do the shopping for you. We make sure you have the best protection at a fair price.
Give one of our licensed agents a call for a quote on your home, auto or business insurance today at 847-907-4520.
[1] This amount is for illustrative purposes only. This example is not meant to indicate an actual relationship between deductible amount and insurance premium cost.