There are so many ways to reduce the premiums you pay for homeowner's insurance, but a common method is by increasing the deductible on your policy. The deductible is the amount you must pay if you file a claim, and here are several important things to know and understand about this.
Higher Deductibles Equal Lower Premiums
Have you ever wondered why raising your deductible would result in lower premiums on your home insurance? The main reason is because a higher deductible reduces the risks on your policy. If you have a $250 deductible (which is usually the lowest amount you can choose), your insurance company would have to pay out more money if you filed a claim than if you had a $1,000 deductible.
For example, imagine if you filed a claim for storm damage that was worth $2,000. With a $500 deductible, your insurance company would have to spend $1,500 settling this claim. If you had a $1,000 deductible, on the other hand, they would only pay out $1,000.
Your best bet to save money on your premiums is by raising the deductible to the highest amount you can, such as $2,000 or more.
The Amount You Can Save
According to one source, you might be able to save up to 24% by increasing your deductible from $250 to $1,000. If you bump it a $5,000, you might save up to 37% on your premiums. If you were currently paying $1,000 a year for insurance, you could reduce this by $370 by bumping up your deductible, and that is a lot of money to save.
What You Should Do To Protect Yourself
If you increase your deductible, you will save money each month, and you could start saving this money in an account, and you could add a little extra each month. The goal is to have an account set up that contains an amount equal to your deductible, and you could use this money if you ever need to file a claim on your policy. Most people make only one claim every 10 years to their homeowner's insurance policies, which means you may only need to pay your deductible every 10 years if you are like the average homeowner.
Saving money on home insurance is possible with this option and many others. If you would like to find out other ways you can reduce your home insurance bill, talk to an insurance company today. For more information, visit websites like http://www.coastcompins.com.Share