Understanding Your Home Insurance Deductible

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Maybe you’ve heard before that your home insurance deductible (the amount of money you must pay if a claim is made and paid out against your policy) should be the amount that you are comfortable spending if a loss should occur. But that means different things for different people. There are several factors that you should consider when setting your deductible amount.

Know How Much You Will Always Have Available

If you’re just starting out in the workforce, you may not have a large amount of money put aside in your savings account, so having a low deductible (say $250) is probably a good option for you. On the other hand, if you have significant savings you should probably carry the highest deductible that your savings will cover. Every claim against your policy will raise your premiums, so if you can cover the cost of the claim, it is probably in your best interest to just pay the damages and not file a claim.

Policy Options Can Save You Money

Maybe one of the reasons you have always wanted a lower deductible is to cover the costs associated with quickly replacing valuables in your home. Did you know that there is an option to cover valuables such as jewelry and art? Valuables policies often do not have a deductible. So if you need to file a claim, it won’t affect the premium of your home insurance/renters insurance policy and will allow you to replace your items quickly.

Technology Can Lower Your Premiums and Reduce Your Risk

Advances and technology keep making our lives easier, but did you know that some of them can even save you money? If you’re a homeowner, installing a burglar alarm, fire system, automatic leak detectors, lighting protection system, or backup battery system for pumps not only reduce your risk for major damage to your home, but they could also lower your premiums, thus reducing the need for a lower deductible.

Make Better Use of Higher Deductible Savings

By increasing your deductible, you will reduce your premiums. These savings can be substantial ($300-600/month). You can then use that money to either increase your overall insurance coverage (have you considered getting an umbrella insurance policy?) or even just put that money into your rainy day/emergency fund to make sure that you do always have the money to cover your higher deductible in case the need arises.


If you live in California and are interested in getting the best premium for your home, fill out our free online quote form and we can get you started on the path to savings.


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