Looking at ways to save money on home insurance is often a top priority. One way you can lower your annual premium is by raising your home insurance deductible. While this can save you money now, it can actually cost you more in the future if you ever have to file on your home insurance policy. Weighing all of the different pros and cons of this decision is key to determining the best choice for your situation.
How Much is Your Deductible?
One of the first things to consider is the current cost of your deductible. You can find this information by looking at the declaration page on your insurance policy. Different coverages may even have different deductibles, as it’s important to read the details of your entire policy. Reaching out to your insurance agent to discuss all of your options is also a good idea in giving you access to professionals to help you make the best decision.
Different Types of Home Insurance Deductibles
Deductibles often fall into three categories for home insurance. The most common type of deductible is a fixed dollar amount. All you need to do is select the amount you must pay before the insurance covers the rest. Another type of deductible is based on a percentage of the total coverage of your policy. These percentage-based deductibles often apply to wind and hail damage. You may also have a split deductible, as a fixed dollar amount applies to certain perils while other parts of your policy are a percentage-based deductible. Discussing all of the different types of deductibles with your insurance agent is helpful in understanding the details of your policy.
Here are a few things to consider before you increase your deductible.
Cost of Your Insurance
Knowing how much you pay for insurance each year is essential in helping you determine if you should raise your deductible or keep everything the same. For example, it’s probably not worth raising your deductible if you are only paying a small amount for insurance each year. Calculating the potential savings each year and the cost of your deductible is key in understanding the most cost-effective option. Comparing insurance from different providers is also helpful in saving money, as an insurance agency can work with you in finding the best insurance to meet your needs.
How Often You Make Claims on Insurance
Another thing to consider is how often you make insurance claims. If you don’t believe you are likely to file on your insurance, you may benefit by increasing your deductible. However, you will never know if you will need to make an insurance claim, which is why it’s important to consider how much of a risk you are willing to take and if you can afford it. You may also want to think about increasing your deductible if you have a history of making insurance claims due to the higher cost of insurance. A bigger deductible will decrease the chance of you filing a claim, which can lead to cost savings over time.
Why You Have Home Insurance
Everyone’s situation is different, which makes a big impact on how you use your insurance. For example, you are more likely to take care of any small issues on your own without filing a claim if you are in a stable financial position, which is why it makes sense to raise your deductible. On the other hand, it’s a better idea to keep your insurance the same if you are afraid of not being able to cover any unexpected damages to your home. You may eventually want to consider increasing your deductible once you build more money in your savings account.
How Big of a Discount Can You Receive for Increasing Your Deductible?
You can often expect to save anywhere from 5% to 10% on your home insurance by raising your deductible, but these savings can even reach up to 25% in some situations. Of course, these cost savings will increase the more you raise your deductible, but you will have to determine your risk tolerance. Over time, these savings can really add up if you don’t have to make any claims on your insurance policy. Setting aside some of these savings in an emergency fund is a great way to remain proactive to ensure you have more than enough money to meet your deductible if you ever need to file on your insurance.
Additional Ways to Save Money On Your Insurance
You can also save money on your home insurance in other ways besides raising your deductible. Shopping around and comparing insurance providers on an annual basis is a great way to find the most affordable policy to meet your needs. An insurance agency can handle this task for you, which saves you a lot of time and effort. Combining your home and car insurance with the same provider can also save you money. Making home improvements is another way to save money on your insurance, whether it’s installing storm shutters, reinforcing your roof, or investing in deadbolt locks.
Contact Wellcovered Insurance for Home Insurance
Wellcovered Insurance works with many clients throughout Volusia and Seminole County. Our top-rated agency can help you find the most affordable home insurance to meet your needs. We also provide personal lines insurance for rental property, cars, boats, RVs, motorcycles, and much more.
One of our main goals at Wellcovered Insurance is to provide the best experience for our customers. You can easily get an auto quote in 15 minutes, while it only takes one or two business days to obtain home quotes. Our team is also happy to answer all of your questions and guide you throughout the entire process of finding insurance.
Feel free to contact Wellcovered Insurance to receive a home insurance quote!