If you are familiar with home insurance, you know one of the terms thrown around the most is "deductible". Other than your premium payments to make certain you continue to have coverage, the deductible is the amount that you, the policyholder, are on the hook for in the event you make a claim and it is approved for payment. This is usually a small percentage of your home value. Insurance for Texans prefers policies for our clients with a 1% deductible, and rarely more.
You contract your policy in the hope you will never have to file a claim. The best homeowners insurance policy is a quiet policy. That's usually not the case. Stuff happens, insurance claims are made, stuff gets fixed.
It's in that timeframe where you hope you will never have to file a claim where things can get a little off kilter if you and your agent aren't operating from the right perspective. When it comes to cheap prices in Texas, beef and insurance premiums are two things you want to be cautions about. One will hurt your stomach, the other will hurt your pocket.
What Does a High Deductible Mean?
Roughly put, a high deductible could mean trouble. In the eyes of the insurance carrier, you agreeing to pay a higher deductible in the event of a claim is the trade you are making to pay less of a premium for the coverage.
You are basically taking the risk that you will not be making a claim. You think putting the savings on premium back in your pocket is worth the risk of having to pay more out of pocket if a covered claim is necessary.
The best thing about a high deductible policy is the savings on premium alone. At the same time, there are other factors which make a high deductible policy less attractive.
Cheaper Can Get You Chapped
Here's where policy holders get squeezed with high deductible homeowners policies. If in the event you have to make a claim, you will most likely see your insurance premium raise.
This is after having to pay the high deductible.
Why don't you just give yourself a paper cut and pour some lemon juice in it? That stings more than The Police.
Also, with your home value sure to increase as it has in Texas (not a bad thing) over the last decades, your deductible can continue to increase. Not having the necessary funds to cover such a large amount (e.g., $300,000 at a 3% deductible is a $9,000 payout you will owe) will make you wish for a larger premium payment. Imagine 4% or 5% . . . yikes.
With Insurance For Texans, you'll have a lot of access to different carriers, meaning a lot of options for coverage which usually yield a good deal for both coverage in relation to premium.
What you won't find with us is searching through the bargain bin to give you the lowest premium possible and put you on the hook with a high deductible that will hurt you later. There are plenty out there who will help you with that. Just make sure you can contact them when it comes to make a claim. You may have some choice words.
Stay covered, Texas. We'll help you do it right.