Insuring your home should be your priority from the day you buy it. When buying your policy, you will be able to choose the coverage limits and deductibles that will ultimately determine your eventual settlement for a given claim. If cost is important to you, as it is to most home insurance holders, then adjusting your deductibles is one way that you might be able to optimize your ability to save money.

Homeowners insurance deductibles ultimately influence how much responsibility an insurer takes for a given claim on your behalf. Therefore, if you can lower their risk of having to spend money by raising your deductible, then you might be able to save money yourself.

Still, deductibles can be confusing, so let’s take a closer look at how to tailor those in your home insurance to your advantage.

Understanding Home Insurance Deductibles

Deductibles are dollar amounts that you have to pay towards a home insurance claim yourself, before your insurance policy pays the rest. In essence, it is a way that you share the cost of a claim with your insurer. Generally, your dwelling and possessions insurance will have deductibles attached, and you can choose a deductible value that is right for you. Certain coverage, like liability insurance, usually doesn’t have deductibles.

Suppose that your home insurance deductible is $1,000, and one day a fire occurs in your home, and causes $3,000 in damage. Your dwelling insurance will pay for $2,000 worth of repairs, while you will pay the remaining $1,000, as indicated by your deductible.

Can I Raise My Deductible to Lower My Premium?

Sometimes, it is a good idea for you to choose a deductible that is higher than the lowest option offered by your insurer. So, instead of a $1,000 deductible, you might choose one worth $2,000.

By choosing a higher deductible, you agree to assume more of the cost of a claim yourself, rather than force your insurer to pay you. Therefore, their cost risk by insuring you might be lower, and they might be able to offer you a lower premium.

Is This the Best Option for Me?

Raising your home insurance deductible might seem like a fast way to save money on your premium. However, it might not be the best choice for you.

When you raise your deductible, you agree to shoulder more of a cost of a claim yourself. Additionally, any claim that falls below your deductible cost will have no coverage at all. All in all, a deductible is a dollar amount that you agree to pay, not your insurer. Therefore, if you choose a $1,000 deductible, you will pay $1,000, and you of course want this to be an amount you can afford to pay.

So, when choosing your homeowners insurance deductible, talk to one of our agents. We know how to help you balance your deductible with your premiums so that you always get the most value out of your coverage.