Whenever an individual decides to purchase an insurance policy he/she must decide the amount of the deductible. Deductible simply is the amount that the insured pays for a loss before the insurance policy pays for the rest of the coverage. This applies to any situation or any type of insurance coverage. It includes such items as purchasing automobile insurance, homeowners insurance, personal property insurance, motorcycle insurance, and small owners business insurance.
Generally speaking, the deductible applies to situations involving property damage or property loss the insured sustains. This can include damage to your vehicle, damage to your home, damage to your personal property or anything else that you insure. It does not include liability coverage which is basically insuring you/the insured in case of negligent acts of the insured causing injury to another. Most of the time there is no deductible which the insured must pay first.
An insured can choose options from no deductible to any amount of deductible the insured wishes. Obviously, the greater the deductible the cheaper the insurance is for the insured. It is surprising to find out what the cost of property damage insurance coverage is when comparing the cost of insurance of $250 deductible as opposed to $2,000 deductible. Because of this, we at the Beattie Law Firm, would encourage everyone to discuss with their insurance agent what the cost of insurance would be if a greater deductible was chosen. If you believe that the chances of seeking property damage coverage due to damage to the property are small or remote it makes sense to increase your deductible. It is important to keep in mind never to choose a deductible that is greater than you can afford.
It is generally thought by the public that if you turn in a claim to your insurance company that the rates or cost of insurance will increase dramatically or insurance coverage will be canceled. This is generally true. Because of this belief, from a practical standpoint, many insureds do not even turn in a property loss to the insurance company for fear of an increase in rates or cancellation of coverage. This would provide even more motivation to choose a greater deductible then you might otherwise. We, at the Beattie Law Firm, are here to help you and give you advice concerning this.
However, difference between the liability policy and property damage policy should be understood when you are determining the best policy, deductible and whether to turn in a claim. All of these are very important economic considerations which may require consultation with your lawyer.