High or Low Deductible? The Advantages of Each

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Protecting your home in Houston, TX for an emergency is why you purchase home insurance. As you choose the best plan for your situation, you will need to choose a deductible option. An insurance deductible can be either a percentage of the total amount of insurance on your policy, or a specific dollar amount. High and low deductibles have different advantages, so be sure to take a look at each choice.

High Deductible

In general, a high deductible will save you money. A high insurance deductible allows you to lower your insurance payments. Depending on your insurance company and coverage, you may pay up to 40% less than you would with a low deductible. Choosing a high deductible for your home insurance means that you are willing to self-insure all or a portion of a claim. A high deductible is a good choice for those who can count on having the amount of cash available to pay a high deductible should the need arise.

If you are considering a high deductible, keep in mind that you may need to cover that amount to pay for emergencies such as:

-Water damage due to flood or fire
-Storm damage
-Restoration services

Those who choose a high deductible can put aside the money saved into an emergency account. Then money will be available to meet the deductible amount should an emergency arise.

Low deductible

A low deductible can be a good choice for those who would prefer not to pay a large amount out of pocket in the event of an emergency. While choosing a low deductible means paying a higher premium each billing cycle, it also means peace of mind knowing you will not have to meet a high deductible in the event of an insurance claim.

As you budget your spending, either on your own or with help from a financial advisor or 3rd party billing service, look over all of your expenses and savings before choosing a high or low deductible for your home insurance. Then you will be able to decide which choice is right for you.

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