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Deducing the Deductible

June 20, 2016

Are you in the market for a home insurance policy?  Need to protect your home?  Chances are that you have looked into various home insurance options and different decisions you will have to make about your policy.  However, you may not be sure about what to select for a home insurance deductible.

What would you be willing to pay out-of-pocket before making a claim? How do you decide on a home insurance deductible?  Here are three tips to help you along that process.

Figure Out What You Can Afford

What is your budget?  Do you have money left over after putting the down payment down on your house?  Will you be able to fix a broken window on your home? Are you looking to save upfront on the premium, or do you want to save in the event of a claim?

Choosing your insurance deductible is very dependent on what your current financial situation is.  If you are not able to afford a huge home insurance deductible because you don’t have any savings at the moment to cover damages, then a lower deductible may be the best route for you.  You should have the deductible amount saved in a bank account somewhere in the case of a claim.  This way you will not have to stress when it comes to making a claim.

How Handy Are You?

Are you good around the house?  Known as Mr. Fix It?  Have a good friend that excels in this area and can be bribed by beer and pizza?  Take this into account.  If you can leverage your skills or other people’s skills in the case of minor damages to your home you may not need to make a claim for those smaller losses.  This way you can save on a lower premium taking a higher deductible which should cover any costs of fixing damages yourself over time. 

What is Your Home Worth?

Do you have a brand new home? Has your home been recently renovated?  These are questions you need to take into consideration when deciding on a deductible.  If you just had your roof redone, you won’t have to worry about having to replace the roof for years.  If you bought an older home to fix up, then a high deductible may be a good option because it is likely you wont make a claim anyways; you’re likely to want to fix everything on your own anyways.

These tips can help get you thinking about a higher or lower deductible, but talk to your MIG Insurance broker today to make an informed decision.

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