Have you looked at your Ohio homeowners insurance recently? Tip: it's okay if you say no. Insurance is not exactly the most exciting or interesting treatment.
However, there is a trend that is gaining momentum and it CAN affect you without you even knowing it: a deductible percentage.
Let me tell you – if you do not understand what the deductible means and how it affects you at the time of injury, you may get a nasty surprise. Many newer insurances now include a deductible percentage INSTEAD of a dollar amount (for example, 5% against $ 1,000). Read on for more explanation and for how these differences become large at the time of damages.
Standard Homeowners Insurance Deductions
The "original" homeowners' deduction is a deductible dollar, such as $ 500 or $ 1
Earthquake coverage has long used a deductible percentage – 2% and 5% are both common examples. The percentage is multiplied by the amount of coverage in your home and which corresponds to your deductible.
What the percentage (%) deductible means to you
Here is an example of how the deductible works.
Let's say you have a 1% deductible. Your home's home coverage is $ 200,000. $ 200,000 x 1% = $ 2,000. Like all other deductibles, the amount you are responsible for is in the event of a covered claim.
If your home is insured for $ 500,000, you would have a deductible of $ 5,000. Big difference! But they would both be listed as 1%.
How about a deductible of 5%? With the above example, it is a simple math problem. $ 200,000 x 5% = $ 10,000. And $ 500,000 x 5% = $ 25,000.
Please note that I do not oppose deductibles, but you must be aware that they exist and without diving into your policy, you do not know what you have. Do not wait to find out in case of injury!
What should I look for when shopping with my homeowners insurance?
So maybe you want to shop your homeowner. Whatever the reason is that you want to be extra careful that you know what you are looking at in the quote.
For example, you have a $ 500 deduction on your current policy. The offer shows 2% deductible. Your home coverage is $ 200,000. $ 200,000 x 2% = $ 4,000 deductible. It's not even a close comparison to your current coverage!
Yes, you may see a cheaper premium, BUT you also increase your deductible by $ 1,500.
Finally, since most homeowners insurance policies include an inflation mortgage, the amount of home coverage will increase each year. This also means that your percentage deductible increases. Flat deductible dollars remain the same year after year.
There are many types of deductibles available – if you do not know what you have and how it works, you may be upset at the time of damages. Call us at (937) 592-4871 or fill out the form below to discuss your options!