Welcome to the HomeInUtah.com Blog

2018-01-17 14:40:34
Balancing Risk and Deductibles

The benefit of insurance is to transfer the risk of loss to a company in exchange for a premium. The deductible is an amount the insured pays out of pocket before the insurance starts covering the cost of the loss. The challenge is to balance the risk an insured can accept with the premium being charged.28227782-250.jpg

To manage insurance premiums, policy holders often consider adjusting their deductibles. Lower deductibles result in less money out of pocket if a loss occurs in return for higher premiums. Higher deductibles will lower premiums but require that the insured bear a larger amount of the first part of the loss.

Insurance companies offer deductibles as a specific dollar amount or as a percentage of the total amount of insurance policy. The amount is usually shown on the declaration page of homeowner and auto policies.

A small fire in a $300,000 home that resulted in $5,000 of damage might not be covered because it is less than the 2% deductible which would be $6,000. If the homeowner can afford the cost of repairs in exchange for lower premiums, it might be worth it. On the other hand, if that loss would be difficult for the homeowner, a change in the deductible for higher premiums could be considered.

Raising deductibles can save money in the present when paying the premium but could cause problems later if a claim occurs. Homeowners should review deductibles with their property insurance agent to be familiar with the amounts and make any changes that would be appropriate.

 

 
Blog Archive
2018-08-14 12:15:23
Replace It Anyway

2018-08-13 12:21:25
What to Avoid Before Closing Your New Home

2018-08-06 16:46:30
Rising Rates Affect the Cost Too

2018-07-16 20:13:49
Owning Makes More Sense

2018-07-09 17:37:48
A Word Homeowners Need to Understand

2018-07-04 20:47:50
Don't Let a Killer In

2018-07-02 07:46:20
Unexpected Expenses

2018-06-18 19:19:14
Waiting Will Cost More

2018-06-11 12:30:00
The Tax Difference in Second Homes

2018-06-08 11:30:16
When Neighbors Don't Seem to Care

2018-05-31 10:01:54
Flag Protocol

2018-05-21 13:13:32
Second Guessing Price

2018-05-14 13:10:20
A Home for Tomorrow

2018-05-07 13:26:33
Assumptions May be an Alternative

2018-04-23 09:48:17
Costs More - Takes Longer

2018-04-12 21:51:58
Waiting Period After Distressed Sale

2018-04-10 18:24:22
Waiting Will Cost More

2018-03-19 12:33:09
Standard or Itemized

2018-03-06 13:27:26
Fair Skies on Horizon

2018-03-05 17:08:02
Your Refund Could be the Difference

2018-02-19 18:58:34
Historical Perspective

2018-02-12 10:13:30
The 'Right' Agent and the 'Right' Home

2018-02-11 13:10:55
Lower Your Expenses without PMI

2018-02-11 12:44:21
Convincing Advantages with Standard Deduction

2018-01-29 20:53:29
Lower Your Expenses without PMI

Click here to see ALL articles.


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.