by Treva Cassidy, CISR on Jun 18, 2013
When was the last time you looked at your home, auto or other policies to check what deductibles you are carrying? If you haven’t checked in a few years, you should review your policies to see if changing your deductibles is something you should do.
Check your home policy
Are you carrying a deductible less than $1,000? If you are, you may be losing out on a large home credit. We suggest carrying a deductible of $1,000 to take advantage of the credits most companies give for higher deductibles. It is often up to 10% credit from the standard $500 deductible. Most people make up the difference between the $500 and $1,000 in premium savings in 2 years!
You should also check to see if you are carrying any special deductibles on your home policy. For example, some companies apply a 1%-3% “Named Storm” deductible. This means 1% of the coverage you are carrying on your Dwelling, so if you are carrying $350,000, your deductible would be $3,500. Most people assume a Named Storm means a Hurricane, but be careful, a named tropical storm such as last week’s Andrea, or a former Hurricane will fall into this category.
Some insurance companies may require that you carry a Hurricane or Windstorm/Hail deductible if you live within a certain distance of the coast. If you are over 1.5 miles from the coast, you may not be required to carry any special deductibles and you should consider removing them.
If you carry Earthquake coverage, ask your agent or company what your deductible is and how it would be applied in an earthquake. Often times, the deductible is 5% of the limit you carry on your Dwelling Coverage. Example: your home is insured for $350,000 and you carry earthquake coverage with a 5% deductible. If you have an earthquake loss, your deductible would be $17,500! You would probably want to know this ahead of time!
Also check your policy endorsements/enhancements for special deductibles in certain claim cases. You may have higher or lower deductible for a water backup/sump overflow loss. You may have a lower or no deductible for a loss to a scheduled items, such as jewelry or cameras.
Check your Auto, Boat and other Recreational Vehicle policies
Check your auto, boat and other recreational vehicle insurance policies too. If you are carrying auto Collision or boat Hull Coverage, we suggest taking a look at the savings of carrying higher deductibles such as $1,000. Often times, carrying a higher deductible can save you several hundred dollars over the course of the year!
At Georgetown Insurance we are here to help you understand your policy. Sometimes this means helping you understand the fine print when it comes to coverages, exclusions and deductibles. This is the value you get for insuring with an Independent Agent!