"This policy contains a clause which may limit the amount payable." A lot of people see this phrase and do not know exactly what it means. The majority of home insurance policies have this on the first page of the document.
They are talking about the deductible on the policy. When you suffer a loss, there's almost always a deductible to be paid. The deductible amount may differ based on the type of loss you experience. A deductible is the amount of loss paid by the policy holder before any loss is paid by the insurer. When the deductible is higher, the premiums paid are lower in comparison.
Depending on the insured peril where the damage occurs, the deductible will typically vary. Deductibles are generally one of these types:
Glass breakage deductibles are to cover broken glass that is part of your home. In most cases, this deductible can be avoided with relatively small additional premium payments.
Earthquake deductible: Applies to claims resulting from an earthquake. Generally, there are a few choices available for earthquake damage deductibles. A percentage of the total property covered by the insurance plan is calculated, and the home owner can choose from these.
Crime deductible: Applies to claims resulting from vandalism, theft, burglary and mysterious disappearance. Vacation and rental properties are generally the only property that these deductibles apply to. Most deductibles are usually either $5,000 or $10,000, depending on the needs of the policy holder.
Water deductibles refer to damage from water, and usually is only for vacation and rental homes. The 2 basic choices are $2,500 and $5,000, depending on the policy holder's needs.
Standard policy deductible: Applies to claims resulting from loss or damage not noted above. For most policies, the home owner can choose in the range of $500 to $5,000, whichever makes the most sense for the policy holder.
Deductibles help keep your premiums down because they prevent payments being made on very small losses. Payments made by insurance companies are lower, and this is the reason they can offer low premiums.
When a deductible is very small, a policy holder could attempt to claim losses that are minimal. If you do, you could lose any "claims free discount" you may be enjoying. Base rates for the homeowner could rise after several smaller claims, and this could be actually more expensive than to repair or replace the damages on your own. When the amount claimed by the homeowner is too great, a renewal of the insurance policy may actually be denied.
Premiums will be much lower when the home owner makes the decision to have a higher deductible. A home owner gets insurance to be covered when a major disaster occurs, like a fire, water damage, windstorm damage, or theft, not for minor damage that may happen in the home. As such, it may be worth your while to opt for a higher deductible. Repairing or replacing a minimal loss by yourself will keep your premiums as low as possible, and in the long run you will save money. At a time where major damage occurs in the home, insurance will be there to protect you.
They are talking about the deductible on the policy. When you suffer a loss, there's almost always a deductible to be paid. The deductible amount may differ based on the type of loss you experience. A deductible is the amount of loss paid by the policy holder before any loss is paid by the insurer. When the deductible is higher, the premiums paid are lower in comparison.
Depending on the insured peril where the damage occurs, the deductible will typically vary. Deductibles are generally one of these types:
Glass breakage deductibles are to cover broken glass that is part of your home. In most cases, this deductible can be avoided with relatively small additional premium payments.
Earthquake deductible: Applies to claims resulting from an earthquake. Generally, there are a few choices available for earthquake damage deductibles. A percentage of the total property covered by the insurance plan is calculated, and the home owner can choose from these.
Crime deductible: Applies to claims resulting from vandalism, theft, burglary and mysterious disappearance. Vacation and rental properties are generally the only property that these deductibles apply to. Most deductibles are usually either $5,000 or $10,000, depending on the needs of the policy holder.
Water deductibles refer to damage from water, and usually is only for vacation and rental homes. The 2 basic choices are $2,500 and $5,000, depending on the policy holder's needs.
Standard policy deductible: Applies to claims resulting from loss or damage not noted above. For most policies, the home owner can choose in the range of $500 to $5,000, whichever makes the most sense for the policy holder.
Deductibles help keep your premiums down because they prevent payments being made on very small losses. Payments made by insurance companies are lower, and this is the reason they can offer low premiums.
When a deductible is very small, a policy holder could attempt to claim losses that are minimal. If you do, you could lose any "claims free discount" you may be enjoying. Base rates for the homeowner could rise after several smaller claims, and this could be actually more expensive than to repair or replace the damages on your own. When the amount claimed by the homeowner is too great, a renewal of the insurance policy may actually be denied.
Premiums will be much lower when the home owner makes the decision to have a higher deductible. A home owner gets insurance to be covered when a major disaster occurs, like a fire, water damage, windstorm damage, or theft, not for minor damage that may happen in the home. As such, it may be worth your while to opt for a higher deductible. Repairing or replacing a minimal loss by yourself will keep your premiums as low as possible, and in the long run you will save money. At a time where major damage occurs in the home, insurance will be there to protect you.
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