What is the Right Homeowner Deductible for You?

When choosing your homeowner deductible, consider your coverage expectations and comfort level with risk. Some people want as much coverage as possible because they are risk adverse, but others only want coverage for larger losses and are comfortable with their increased risk. With a deductible that is right for you and your family, you can meet your coverage needs and possibly reduce your homeowner premium, too.

If you choose a lower deductible:

• You will transfer more of your risk to the insurer.
• Your out-of-pocket portion of the claim (i.e. the deductible) will be lower.
• Smaller claims (over your deductible) will be covered.
• Your homeowner premium will be higher.
• If you submit multiple small claims, your insurer may be concerned about claim frequency and either decline to renew coverage or require that you increase your deductible. Renewal premiums can increase based on claims frequency, too.

If you choose a higher deductible:

• You will retain more of your risk, transferring only larger losses to the insurer.
• Your out-of-pocket portion of the claim will be greater.
• Smaller claims (under your deductible) will not be covered.
• Your homeowner premium will be lower. Higher deductibles sometimes make a substantial difference in premium.
• Your loss history will not reflect smaller (under the deductible) losses, which means that your insurability and future premiums will not be affected by them.

We recommend that clients consider a higher deductible that will be financially manageable in the event of a loss. Insureds often see a significant premium reduction simply by increasing their deductible from $1,000 to $2,500 or $5,000. Our insurers offer a wide range of deductibles, from $500 to $25,000 and higher.

Your Account Advisor can answer your questions and provide guidance on choosing a deductible that is appropriate for you and your family. We are happy to provide optional quotes for your consideration.

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