Should You Choose A High Deductible For Home Insurance? https://www.bicfl.com/products/home-auto-insurance/home-insurance Should you choose a high deductible for home insurance, is this the right move? Generally, the higher the deductible the more you save, however, sometimes it is worth looking at.
Bob Newsome the President of Business Insurance Center talks about different scenarios when it comes to higher deductibles for your home insurance. For example, what would it save you if you want from $1,000 to a $2,500 deductible? If you did not have a claim for 5 years are you going to come out ahead? The goal is to save money on your homeowner’s insurance policy.
Conversely, you don’t want to save money if you don’t have the money to pay for it. If you have a claim, that deductible is taken out of the money that you get in return. So, it must be something you can afford.
You wouldn’t want to go from a $1,000 deductible to a $2,500 deductible if the savings is $50. Over 10 years, you would have only saved $500 and you raised your deductible by $1,500 so that needs to be looked at carefully.
Then, there is also the hurricane deductible. It is more beneficial to the homeowner if it is a hurricane deductible and not a wind and hail deductible. If there is a hail claim or a non-name storm and you have hurricane coverage, then it will fall under your AOP deductible.
However, if you had a wind and hail deductible and not hurricane any little thing that is wind-related is going to get picked up on your wind deductible. You can sometimes get hurricane deductibles for a flat one thousand dollars and not a two percent.
What you will typically see is a two percent hurricane deductible. Let’s use an example of a house that is worth $100,000 and your deductible is a two percent or two thousand dollars. If you have a million-dollar home and a two percent deductible, that’s twenty thousand.
You can get a one percent, a two percent, a three percent, and sometimes as much as a five percent deductible. Bob mentions that he just quoted a $300,000 home to go from a one-thousand-dollar deductible to a two percent hurricane deductible which only saved seventy-eight dollars over 12 months. So, in his opinion, it wasn’t worth it to go from a $1,000 deductible to a $6,000 deductible for hurricane coverage.
These are the little things that need to be paid attention to because they can make a significant difference. On that same example, if you have a $100K home and you have a 5% hurricane deductible, you are at $5,000. If you have a million-dollar house, you are paying the first $50,000 if you have a hurricane loss.
We hope you enjoyed Bob answering the question of should you choose a high deductible for home insurance. Contact us today for all of your insurance needs whether work or home-related, we’d love to help you. Business Insurance Center has three centers in Central Florida to help serve your needs.
Business Insurance Center 6979 Kingspointe Pkwy Unit 9 Orlando, FL 32819 407-354-9868
Business Insurance Center 325 North Belcher Rd 1st Floor Clearwater, FL 33765 727-726-4989
Business Insurance Center 1700 South Florida Ave Lakeland, FL 33803 863-616-1755
