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 having the right coverage (which is important if you need to make a
But what is a deductible? And how do deductibles work for your home and
[intro music]
>> 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.
[laughs]
What is a deductible? Why do insurance deductibles exist? How insurance deductibles work How auto insurance deductibles work How home insurance deductibles work Who decides my insurance deductible? When do I not need to pay a deductible? How can I manage my insurance deductibles?
What is a deductible?
A
For example, if your policy’s deductible is $1,000 and you have a loss under your policy that costs $10,000, you’ll pay $1,000 and your insurer will cover the remaining $9,000. (But, this also means that if you had a loss worth less than $1,000, it wouldn’t be covered by your policy.)