There are a lot of factors to consider when it comes to your home and auto insurance. Sometimes it can feel like a balancing act between making sure you have the right coverage (which is super important) and trying to get the lowest price. You don’t necessarily have to give up one for the other; deductibles can help turn this tug-of-war into a win-win situation. But what are deductibles? We’ll let our expert and licensed Insurance Advisor, Lorien, take it from here to explain what deductibles mean for both your home and auto policies. It’s simpler than you might think.
>> Lorien: Hey guys, I'm Lorien. I'm a customer service hero, and an insurance agent, and it's pretty fun.
>> Lorien: I'm here to talk to you about deductibles, and what they mean for you for your home policy and your auto policy.
>> Lorien: It's pretty simple, simpler than you might think.
>> Lorien: A deductible is the amount that you're responsible for paying first, in the event of a claim before your insurance kicks in.
>> Lorien: Let's just say you have a claim that costs 10 thousand dollars and your deductible's a thousand dollars. You're going to pay that thousand dollars and your insurance company is going to pay the remaining 9 thousand.
>>Lorien: If we didn't have deductibles there would be a bunch of small claims which makes your premium go up.
>> Lorien: If you have a higher deductible, you're going to be paying a lower premium in the long run. Whereas if you have a lower deductible, then your premium is going to be higher, it's like switch one for the other kind of thing.
>> Lorien: It's really up to you and your level of financial comfort, how much you're going to be able to pay out of pocket should something happen.
>> Lorien: Deductibles do apply to both home and auto policies they're a little bit different though and I'm going to help you understand how they work.
>> Lorien: Let's just say you have a house insurance claim and it's pretty expensive, and you're thinking aw man am I going to have to pay the deductible too? Well, not necessarily.
>> Lorien: A lot of companies do have what's called a deductible waver so that means that once a claim goes above a certain amount it won't have to pay that deductible.
>> Lorien: So when it comes to car insurance, the deductibles do work a little bit differently from home.
>> Lorien: For example, collision and comprehensive you can actually pick different deductibles for those two coverages depending on what works best for you.
>> Lorien: So at the end of the day if you have any questions about deductibles, all you have to do is contact your agent, they'll be able to help you.
What’s a deductible and why do they exist?
In insurance terms, a
Although you probably wish that you didn’t have to pay a deductible at all, they exist to help keep the price of your insurance down. If we didn’t have them, there would be a lot of small claims, which would increase everyone’s premiums. Plus, deductibles act as an extra incentive for you to take good care of your home and car.