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  • Christina DeSimone

How to pick a deductible.

          Every insurance policy contains a deductible. Typically, the deductible is your responsibility when you are looking to get your personal property replaced or repaired. For example, a fire destroys your living room and you're looking to repair the damages and replace your belonging or maybe you crashed into a tree and need your bumper replaced. 

         Let's go with the car crash scenario. If you you carry a $500 deductible and end up with $1,000 worth of damage, your insurance company is going to issue you a payment for the remaining $500.  If you have a $1,000 deductible and $1,000 worth of damage you aren't going to get anything from insurance.  

   Estimated Damage-deductible=claims payment 

         Now that you understand how a deductible works, I'd like to get to the main point of why We are here. When you carry a higher deductible, your premium is going to be lower. Great! You're saving money monthly BUT what happens when you are involved in a covered claim and you don't have the extra money to cover your deductible? Your insurance company isn't stepping up to front you the money. After all, the deductible is YOUR responsibility.  

         Sometimes it's easier to pay the extra monthly premium than to come up with a larger deductible at the time of need. So before you maintain an increased deductible, ask yourself if you have the extra money in the bank or if it is better for you to spend a smaller amount monthly and keep a lower deductible. 

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