Named Insureds don’t necessarily need to save an amount equal to their Homeowners Policy Deductible. The type of loss in question will, in part, dictate that. If it is a total loss fire, then the amount of coverage paid out in their Claim may dwarf their Deductible amount. If it is a fence loss, however, then their Deductible amount may seem large, in comparison to the amount which will be paid out for their Claim. I have a $2,500 Homeowners Deductible, and thus largely self-insure for any fence or roof shingle claim. I sell a higher Deductible amount to clients by telling them that the insurer penalizes them for having a lower Deductible, as they are more likely to file a Claim, and thus charges them a higher premium for the privilege of carrying a lower Deductible. Conversely, the insurer credits them for having a higher Deductible, as they are less likely to file a Claim, and thus charges them a lower premium since they are self-insuring for more of the risk. Most Named Insureds don’t save the amount of their Comprehensive or Collision Deductibles on their Auto coverage, either, but the same principle applies, of the inverse relationship between Deductible amount versus premium. Great article. Thank you for allowing me to put in my two cents’ worth regarding saving for the Deductible amount.
Named Insureds don’t necessarily need to save an amount equal to their Homeowners Policy Deductible. The type of loss in question will, in part, dictate that. If it is a total loss fire, then the amount of coverage paid out in their Claim may dwarf their Deductible amount. If it is a fence loss, however, then their Deductible amount may seem large, in comparison to the amount which will be paid out for their Claim. I have a $2,500 Homeowners Deductible, and thus largely self-insure for any fence or roof shingle claim. I sell a higher Deductible amount to clients by telling them that the insurer penalizes them for having a lower Deductible, as they are more likely to file a Claim, and thus charges them a higher premium for the privilege of carrying a lower Deductible. Conversely, the insurer credits them for having a higher Deductible, as they are less likely to file a Claim, and thus charges them a lower premium since they are self-insuring for more of the risk. Most Named Insureds don’t save the amount of their Comprehensive or Collision Deductibles on their Auto coverage, either, but the same principle applies, of the inverse relationship between Deductible amount versus premium. Great article. Thank you for allowing me to put in my two cents’ worth regarding saving for the Deductible amount.