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Understanding Insurance Deductibles

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As an insurance broker in Colorado Springs, we understand that insurance terminology and structure can be confusing. In order to combat this issue head-on, we strive to provided insurance buyers with the valuable information they need to make the best decisions specific to their needs. One of these rather confusing terms is deductible. At Alliance Insurance of the Rockies, we are always looking out for the well being of the insurance buyer, which is why we want to clarify and demonstrate what a deductible is and how it will affect your insurance plans both now and in the future. 

What Is A Deductible

The deductibles you select are basically the amount you are self-insured for when a loss occurs.  The higher your deductible, the lower your premium will be as you are self-insuring for a greater amount. Meaning that if you have a loss or an insurance claim, you will need to be required to come up with this money in order for your assets to be covered. It is important that you feel comfortable with this deductible so that in the event of a loss you can afford it.  

Homeowners Insurance Deductibles

A typical homeowners’ Insurance policy will have two deductibles. The first being, wind/hail deductible, and the other deductible cover all other losses. 

Wind/ Hail Insurance Deductibles

In recent years Alliance Insurance of the Rockies has noticed an uptick in deductible requirements in Colorado, this is typically due to the yearly amounts carriers paid out for hail losses during the previous year. For example; In 2018, Colorado beat Texas in dollars paid out for hail claims. In some cases, this is forcing the carriers to set a minimum Wind/Hail deductible on homes sometimes as high as $2500. As we discussed earlier this means that after a hail storm if your home sustains damages and needs repairs you may be required to provide $2,500 to the insurance company in order for them to cover the damages. In some other cases, some carriers are determining the deductible based on a percentage of the dwelling’s total insurance value. In this case, your policy will list the wind/hail deductible at x% of the amount your home is insured up to. What this means is if you have a Dwelling that is insured for $400,000 with a 1% deductible, the deductible you would have to pay is $4,000 in the event of a wind/hail loss. 

Fortunately for you, Alliance Insurance of the Rockies is able to quote with several different carriers helping us combat these high deductibles for your policy. Since Colorado is considered a hot spot for hail we are determined to fight for the best possible deductible on your behalf. When we quote for you, we want to be sure you are comfortable with the deductible you select. We have worked with a few carriers, depending on your location, that will consider a wind/ hail deductible for as low as $1500.

All Other Losses Deductibles

A common deductible for non-wind/hail claims on your home is $1,000. Similarly to wind/hail we want to ensure that you are both comfortable and able to pay a deductible in the event of home damage. Fortunately, we are also able to work with you and your insurance carrier to make this a reality.  If you are shopping for insurance, it is important to make sure the deductible amounts are the same as they both have a direct effect on the overall insurance premium.

Car Insurance Deductibles

Auto insurance allows you to protect your automobile but remember that the same principle applies to your auto deductibles and premiums. The higher your deductible, the lower your premium. Typically there are two deductibles for automobile insurance. The first being collision deductible and the second being comprehensive. 

Collision Deductible

 A collision deductible will come into play when your vehicle collides with another object. That other object could be another car, a building, basically, anything that your car hits and cause damage. Similarly to your home, you will be required to pay your deductible to the insurance company in order to receive the insurance coverage. 

Comprehensive Insurance

 The comprehensive deductible is for other types of losses that do not pertain to a collision such as hail, a deer hit, fire, and windshield or glass claims. In some cases, some companies can offer a lower or even a 0 deductible on glass claims. For example, in the event of one of those famous Colorado spring snowstorms, if a tree branch were to break off and land on your car causing damage. If you have Comprehensive insurance on your plan you would be able to pay your deductible and get your car repaired. 

Insurance Deductibles | Alliance Insurance Of The Rockies

At Alliance Insurance of the Rockies, we strive to educate our insurance buyers allowing them to make educated decisions that will benefit them now and in the future. We are passionate about completely meeting your needs and providing you with an insurance package that you are comfortable with. The Alliance team has over 25 years of experience as insurance brokers in Colorado providing all of our clients with a comprehensive plan that fits their specific needs, wants, and comfort level. Connect with our team at Alliance Insurance and allow us to develop a customized plan built just for you.  

Madeleine

Madeleine

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