Understanding your Deductible
Your homeowner’s insurance deductible is one of the most important things to consider when purchasing your insurance policy. You need to understand your deductible and give careful consideration in choosing the right amount. Why? Because this is the amount of money you are agreeing to pay out of your own pocket should you have an insurance claim. While it might seem like a great idea to have a sky high deductible when you are considering your cost of insurance it might not be so great if you actually have an insurance loss!
Sometimes it can be overwhelming trying to understand the ins and outs of your policy. We are here to help you in this process.
What is a Deductible?
As we discussed in our previous blog, your homeowner’s insurance will protect you from certain losses. When you submit a claim to your insurance policy it’s important to realize that you must pay your deductible to who ever is repairing your home and most companies will want this money up front. Your deductible is a set amount of money that you will pay toward the claim. Once you pay your deductible, your insurance company will usually cover the rest of the loss up to your policy limits.
The amount that you pay for your insurance premium will depend on your deductible. If you agree to pay a high deductible than your policy will cost less. If you choose a lower deductible than your policy will cost more. Deductible amounts range anywhere from $500-$10,000.
Let’s say you submit a claim to your insurance company for water damage in your home. First, you will want a professional company such as ServiceMaster Restore to come assess the damage in your home. In the case of most water or fire damages a company such as ours has an understanding with your insurance company that allows us to do the emergency services needed on your home right away with out having to have an insurance adjuster physically inspect your home. This can save your home a lot of damage.
Once emergency services have been preformed on your home, you will likely receive an estimate from a Disaster Restoration company such as our which outlines to how much the work will be. We work closely with insurance companies throughout this entire process and it is actually the insurance adjuster, not you, who approves the amount of the repairs that the Disaster Restoration company is proposing. When your insurance agrees to cover the amount that the repairs costs, you will pay your deductible to the company that is doing the repairs and most companies will require that you pay your portion prior to the repair work beginning.
For example, we will say your deductible is $500. If the estimate for your water damage repairs, outside of the cost of the emergency services, is $10,000 and your insurance adjuster agrees to this amount, you will pay $500 toward the claim and your insurance will cover the remains $9,500.
Because most restoration companies will require your deductible payment before beginning repairs on your home it is vital that you choose a deductible that you can afford out of pocket at any moment. A few dollars saved on premium will pale in comparison to a long period spent in your home with out the needed repairs because you could not produce the necessary deductible payment. Finding the right plan and understanding it is important.
You may not give it much thought until you are faced with a loss, but hopefully after reading this post you will go check your policy. Call your agent to make sure you can handle your deductible if the need ever arises. ServiceMaster Restore is here for you should a loss in your home happen. We have years of experience with the insurance claims process and will work with you and your insurance, providing the best service possible. Give us a call at (704) 324-8528.