Higher Deductibles

Higher deductibles and cost sharing becoming a possible new normal in the insurance industry.

Higher deductibles encourage policyholders to be more cautious and proactive in preventing claims. When people have financial stake in the game, they are often more diligent in risk management, which leads to fewer claims and lower costs long term on both sides of the fence. Do not always react and call in a claim until you have some time to discuss it over with your Agent.

On the Homeowners side, the introduction of the ½ % and 1% deductibles was rolled out years ago and we may find ourselves seeing more of this trend throughout the industry. Some carry $1,000.00 for their collision deductible on the auto insurance for a $30,000 vehicle all while also carrying a deductible of $1000 for a $300,000 home. This is no longer sustainable. This is where the industry is going to shift to the 1%, meaning if your home is Insured for $300,000, you will then have a $3000 deductible. They believe this is in alignment with clients’ financial capacity.

So be aware of your deductible and remember that this will be your out of pocket cost if a claim occurred, so choose wisely for your future self!