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Understanding Insurance Deductibles

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Understanding Insurance Deductibles

Understanding Insurance Deductibles

What You Should Know About Insurance Deductibles

Many of us know that we need insurance, from car insurance to homeowners insurance to health insurance. However, do we really understand what we’re buying? A large part of what makes or breaks our finances is the insurance deductible. The deductible is the amount of money you will pay in an insurance claim before the insurance coverage starts paying for you. Too high and we face financial strain before our insurance kicks in, and too low can mean that we pay a higher premium.

How Deductibles Work

For dollar amount deductibles, a specific amount of money would come off the top of your claim payment. For example, if your policy states a $1,000 deductible, and your insurer has determined that you have an insured loss worth $10,000, you would receive a claims check for $9,000. Typically, percentage deductibles only apply to homeowners policies and are calculated based on a percentage of the home’s insured value.

With auto insurance and a homeowners insurance policy, the deductible applies each time you file a claim. In addition, deductibles generally apply to property damage, not to the liability portion of homeowners or auto insurance policies.

Choosing the Right Deductible

The higher the deductible, the lower the cost of insurance. Conversely, the lower the deductible, the higher the cost of insurance. Choosing the right deductible will be different for everyone’s financial picture. For example, for those living without separate savings for a large deductible, it may make more sense to select a lower deductible so that the unexpected out-of-pocket cost is lower.

When shopping for insurance, you should always ask your insurance agent what the premium costs are at each of the available deductible levels. Knowing this information may help you make a sound decision regarding your coverage.

The team at Little & Sons Insurance Services in Banning, California can help find you reliable coverage. Contact us today to get started on securing quality insurance policies.

Little & Sons Insurance Services

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Little and Sons Insurance Services is your complete insurance resource. Since we were established in 1922, we assist individuals and business owners with all of their insurance needs, whether it be for auto, home, or commercial insurance. As an independent, full-service insurance agency, our duty is to our clients’ best interests.

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After 23 Years of serving our clients at our location in Beaumont, CA it is with a heavy heart that we are consolidating our operations to our Banning Office. We will be available all the same hours and will work to make this transition as smooth as possible. Thank you for your continued business and we look forward continuing to serve your insurance needs. Our contact information will stay the same so feel free to contact us.

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