Home Insurance Deductible
So, you are getting ready to buy your new dream house and can’t wait to move in. There is a huge checklist of things to do, like get a moving van and a security system set up. One of the most valuable keys to homeownership is getting the right coverage and securing investment. After all, for most people, this will be the single largest purchase in their life, and it needs protecting. Let’s focus on how to get home insurance deductible savings so you can keep more of your hard-earned money and enjoy life more. Get quoted today with Praetorian home insurance online.
There are several elementary steps you can take to save on homeowners insurance. One often-overlooked option is changing the deductible amount. Remember, the deductible is the amount you are responsible for paying before your coverage takes effect. Recent research shows the amount of savings you can expect by raising it.
One such study by Quadrant is helpful that was based on a typical home with a value of about $150,000.
- Increasing deductibles from $500 up to $1,000 = 6% cost savings
- $500 to $2,000 saves 16%
- $500 to $3,000 resulted in savings of 20%
- $500 to $5,000 saved 28%
To put that in perspective, the average homeowner pays about $1,100 annually for coverage, according to the NAIC or National Association of Ins Commissioners.
This means that changing the deductible amount from $500 to $5,000 would equate to about $300 yearly in premium reductions.
The Importance of Home Insurance Deductibles
Data shows that the sum of a deductible relates to the frequency of homeowners’ claims. The more claims people file, the more costly this is to insurers, which raises rates. People with low deductible plans, $500, for example, will file a claim for a busted door or fireplace that might be only $2,000 or less in damages.
Now, if someone has a home policy that sets the amount at $2,000, then the likelihood of claims for more minor issues decreases significantly. Finally, the max deductible amounts drastically reduce claim filings, and thus insurers tend to reward these customers more with lower premium costs.
Crazy accidents and Kids breaking things.
Most homeowners’ claims are for amounts under $10,000, like flooding in the bathroom, smoke damage, or petty theft. If you always seem to have crazy accidents and kids breaking things all over the house, you might want to consider a lower deductible. However, if you are responsible and take good care of your place, raising it to a high amount can save you hundreds each year.
Saving depending on the state you live in
It would help if you remembered that you would save more or less depending on your state. For example, having a $5,000 deductible in North Carolina can save you over 40% off premiums. Oklahoma also has some cheap plans if you raise it. On the flip side, most people know that homeowner’s coverage is expensive in Florida, which has the second-highest costs for coverage.
A recent study by the “NAIC” showed home insurance, on average, costs about $2,100 per year in the sunshine state. This is more than double the costs in other states like Tennessee. However, a great way to combat these high costs is to raise your FL deductible to $5,000 and push those premiums down. Get all the best deals online at Praetorian homeowners insurance today.
Choosing a home insurance deductible is your choice and depends on many factors.
Many financial advisors suggest it should be set around 0.5 to 1% of the property’s value. So, if your house is worth $500,000, you should consider a deductible between $2,500 and $5,000. If you go for a high limit, set this money aside if you need to file a claim.
Get Cheaper Home Insurance Online
Now that you know about home insurance deductibles, it is time to check some quotes. One of the top providers in the country is Praetorian Insurance. They have great deals on bundling home and car insurance online. All you have to do is get a free, no-obligation quote, and you will be matched with the best plan and lowest rate. Apply now online and get the savings you need.