At Morris & Templeton Insurance, we want you to get the most out of your insurance policy. The first step in doing so is understanding the role deductibles play when insuring your home, your car, or your boat.
A deductible, simply put, is the amount of money you would have to pay out of pocket in an insurance claim before your coverage plan actually kicks in. Should an accident occur, the deductible is the amount of money you have to come up with before a claim gets paid by your insurance company. Then, the amount of the deductible is subtracted from your claim payment.
So why do they even exist? Deductibles protect you! They are the best way to share the risk between you, your insurer, and the policyholder. In most cases, the larger your deductible, the less you pay in premiums. But it’s not quite that simple, especially when living on the coast.Deductibles, and the premium for each, are highly dependent on your property’s location, and its likelihood of a natural disaster to occur.
Insurance Deductibles
The most common type of deductible is “All Other Perils” Deductible. Most homeowners, no matter the location, will see this on their insurance policy. Then there are three other forms of deductibles we need to understand. Wind and Hail Deductibles go into effect when the damage is caused by any wind or hail. Named Storm Deductibles is the next option. This is a big one for our coastal region and includes the damage caused by a tropical storm or hurricane. The final category is the Hurricane Deductible, as expected, this is a much higher insured retention. It will only go into effect if the damage was caused during hurricane-strength winds within 72 hours of making landfall. For property owners in areas prone to tropical systems, like our own, the Hurricane Deductible is an option to highly consider as it will give you that added sigh of relief during the dreaded hurricane season.
Deductibles are either a specific dollar amount or a percentage of the total amount insured. Most often, these types of insurance take form in a percentage. Let’s say, for example, you have a homeowner’s insurance policy of $750,000 and a 2% hurricane deductible; disaster strikes and you are now responsible for $15,000.
Now is the time to look over your insurance policy and know your deductibles. Morris & Templeton Insurance helps you understand the difference so you can avoid any surprises the next time we hear the threat of a hurricane. Call them at 912.355.4549 today or visit their website at morristempleton.com.
