As you are looking over your homeowners or auto insurance in Carrollton, Texas, you are sure to see the term “deductible” appearing throughout your policies. But what exactly is an insurance deductible and how does it affect your coverage? Here’s what you need to know when it comes to insurance deductibles.
What is it?
An insurance deductible is the amount of money you agree to pay out-of-pocket towards an insurance claim. For instance, if you have an auto insurance deductible of $500 and you get into an accident, then you would be responsible for paying this $500 before your insurance kicks in and covers the remaining cost of the claim. It’s also important to know that your deductible and premium have an inverse relationship. This means that the higher your deductible, the lower your premiums will be and vice versa.
Why does your deductible amount matter?
Most home and auto insurance providers offer policyholders the ability to adjust their deductible amount whenever they need to. When choosing your deductibles, it’s important that you choose an amount that you can comfortably afford to pay. While many people set a high deductible so that they can save money on their premiums, this is a risky strategy. If you set your deductible too high, then you risk not being able to access your insurance coverage when you need it the most. When setting your deductible, you should choose an amount that you can readily afford to pay if necessary.
This is what you need to know about insurance deductibles. Do you have further questions regarding your home or auto insurance in Carrollton, Texas? Then don’t hesitate to contact the experts at Mike Leonard Insurance Agency. Our dedicated team is eager to find you the right coverage from one of our many carriers including: Kemper, MetLife, Travelers, The Hartford, Safeco Insurance, Progressive, and American Strategic Insurance.