Thursday, May 14, 2015

Deductibles 101

Whether you're looking at homeowners, auto or health insurance at the Lake of the Ozarks, you're going to have some type of deductible. What exactly is a deductible? Well it is a way for you to share a portion of your costs with your insurance company before your insurance coverage kicks in every year. Below we bring you the basics you need to know about deductibles.

What is a Deductible? 

A deductible, in regards to insurance policies, is a specified amount of money that the insured must pay before an insurance company will pay a claim. Depending on the policy, the deductible amount is typically calculated yearly, therefore you must meet that amount for each year of the policy. However, the amount could apply to each covered incident. After you have paid your deductible amount, your insurance benefits kick in and you're then only responsible for paying monthly premiums and coinsurance if applicable.

Deductibles and Monthly Premiums

Deductibles are typically used to deter the large number of trivial claims that a consumer can be reasonably expected to hear the cost of. A plan with a high deductible will have a lower monthly premium, but you'll pay a lot upfront when you file a claim. A lower deductible will have higher monthly payments, but you won't have to pay a ton upfront if something major happens. If you have bad health or live in a congested area where car accidents are more frequent, a lower deductible could be less expensive in the long run. There are pros and cons to each.

Choosing Your Deductible

When choosing what your deductible should be, there are several things to consider:
  1. Your financial ability to pay the deductible in any given year. 
  2. Your comfort level with paying the monthly premium amount. 
  3. Your risk whether it be your health or the likeliness of an accident/natural disaster occurring. 
Several different deductibles can be set by the Lake of the Ozarks insurance company based on the cause of the claim. For example, a single homeowners insurance policy may contain multiple deductible amounts for loss or damage arising from theft, fire, natural disasters, etc. 

Talk to your Lake of the Ozarks insurance agent today about choosing the right deductible for your situation. At Insure the Lake, we can take care of all your insurance needs. From homeowners policies to health insurance coverage, we're here to help! Give us a call at 573-348-2794 today!

Contact Insure the Lake today for all your Lake of the Ozarks insurance needs! 

About the Author: Steve is a double back-flip insurance ninja. He was named Young Insurance Agent of the Year by the Missouri Association of Insurance Agents in 2010 and is a Certified Insurance Counselor. When he is not helping customers, he enjoys community service, Latin dancing with his beautiful wife and going on adventures with his two awesome sons.

Steve Naught, CIC

3736 Osage Beach Parkway
Osage Beach, MO 65065
Next to Golden Coral

T: 573-348-2794
F: 573-348-0191