An insurance policy provides people with a sense of security. The main reason people take an insurance policy is to protect them from unforeseen events or situations. Accidents or Health issues never come informed, they suddenly hit you disrupting your smooth sail. If someone in your family needs medical assistance it is quite hard to cover complete expenses without a policy. Not only health, but people also make policies for their houses, businesses, automobiles, etc.
Most people think when they make an insurance claim they will get every penny they have/will spend reimbursed. However, this is not the truth. Before they pay you the amount, they will cut a certain amount as the insurance deductible. Simply put, some money will be coming from your pocket. If you already know about insurance deductibles, awesome. However, if you don’t know, no issues, you can find out now.
What are insurance deductibles?
Insurance deductibles are one of the critical elements of an insurance policy. The most simple and basic explanation regarding insurance deductible is, it is an amount that you will be paying from your pocket before the insurance company pays your claim. The insurance deductibles are either in dollars or percentage. You should check the deductibles section of your policy clearly to understand the deductibles in your insurance. Another important thing that you need to know is that different insurances apply deductibles differently.
Incase of homeowners insurance policies you will be paying separate deductibles for every insurance claim. However, in the case of health insurance, one deductible covers all the insurance claims within a year. If you’re wondering how much is your deductibles in homeowner insurance, it is quite easy to find it. You can track deductibles for homeowners insurance through an app. Fund My Deductible has made compliance and collection of deductible simple, safe, and smart. If you want to know more about automating your insurance deductible then visit fundmydeductible.com.
Most people think that insurance deductibles to insurance companies. Well, it is not completely accurate, shocked? There are a few things that you should know about insurance deductibles. Stick till the end of this article to find out more about Insurance deductibles.
Deductibles are not paid to Insurance companies
As discussed above, this is one of the most common misconceptions that people have regarding insurance deductibles. Deductibles are the amount that you will be paying out of your pocket before your claim is processed. It is not the amount that you own or pay to the insurance company. Simply put, a deductible is an amount that you have agreed to self-insure. This amount will not be paid by the insurance company. Let’s talk about this with an example to help you understand better. If you have taken an insurance policy for your home with a deductible of $500. And you have a damage claim of $3000 regarding your policy. The insurance company will only pay $2500 the rest $500 will come from your pocket.
Deductibles promote responsibility
Many people are confused about why they should pay for deductibles while they are already paying for the insurance policy. Well, it is a valid question. There are many answers to this question. But the most common and straightforward answer is that it promotes responsible ownership. Since the owner is also paying for the damage they will make sure that this situation doesn’t arise in the first place. Don’t you agree? This is in the best interest of both insurance companies and the policyholders. To make sure that the owner takes the maintenance seriously, deductibles are kept in place. Not only that, but the insurance company can also avoid paying for small repairs/losses that could be easily avoided by proper maintenance.
Zero deductible policies
As you already know, the insurance deductible is the amount that the policyholder will be paying. This must make you wonder whether there are zero deductible policies. Yes, there are zero deductible policies. There are a few circumstances where these types of deductibles are present in the policies. But they surely come with a price. It is beneficial in some cases whilst in other cases, it may end up being costly. So it is your call to decide when it is perfect for your policy. And it is only possible if you understand your insurance plan better. Another important thing, if you find a policy without a deductible, ask the provider- the price with and without a waiver, and then make a decision.
Choosing between deductibles depend on policies
There are two types of deductibles i.e., high deductible and low deductible. Apart from this, you also know that there is zero deductible. Most people think that choosing a policy with a high deductible will result in double spending as they have to pay for insurance premiums whilst spending money from their pocket at the time of claim. But paying a high deductible is also beneficial in some cases as you can save premiums. Yup, you heard it right. For people who think low deductibles is the best option. Here this out! If you have a low deductible, there are chances that the insurance company may surcharge the policy. While in other cases, it may be better to go for a policy with low deductibles. Confusing, right? Just to summarize this simply, you should be choosing your deductible based on the policy you’re taking.
Wrapping up
Hope you have understood everything you need to know through this article. The next time you’re purchasing a policy, make sure you check the deductibles section before making the decision. From home insurance to health insurance, people pay for different policies every year. So you must remember that all these different policies have different deductibles. Not only that, but the amount of the deductible you will be paying will also differ from plan to plan. The above-mentioned are a few things that you should be knowing about deductibles. With the help of this article, hopefully, you have gained better clarity about the insurance policies and deductibles.