Choosing the right deductible is essential for every homeowner.  

Homeowners insurance is there to keep your belongings protected, right? While it does, it only protects you up until a certain limit. A deductible is there to safeguard your finances, as well as your belongings.

While every homeowner will understand that insurance keeps their home and belongings protected throughout perils and lengthy lawsuits, many overlook the importance of the deductible. Within your home insurance is a deductible, which is the amount deducted from an insured loss. When filing a claim to repair your home or replace your personal belongings, the deductible would come out of your pocket. So, you want to keep it as low as possible, right?

In short, when you’re selecting your deductible, it’s important to take into consideration your financial picture. If you set your deductible to $1,000, but don’t have that cash on hand when you file a claim, you’ll be left in a less-than-ideal situation.

Typically, there are two types of deductibles to choose from:

• Dollar-amount: For example, $500 “dollar deductible.” If your claim was for $10,000, your insurance company would take care of $9,500, while you pay the remaining $500.
• Percentage based: These are based on a percentage of your home’s insured value. If your home is insured for $100,000 and your insurance policy has a 2 percent deductible, $2,000 would be deducted from the amount you are reimbursed on a claim. For example, if the insurance loss is $10,000, you would be paid $8,000, and you’d need to cover the rest.

The right deductible will be different for every person. In short, you’re balancing the short-term cost that you can afford (your deductible) against the long-term cost of your policy (your premiums). Those who select a high deductible to pay themselves are rewarded with a lower monthly premium – but they pay more out of pocket in the event of a claim.

Talk to your La Habra local expert to come to the right deductible for your needs and budget. Contact Martplan Insurance Agency, serving areas of California, for the insurance policies to best suit you!