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How to Choose Your Insurance Deductible

Deductibles are a vital part of your insurance policy. Read on to find out what they are and factors that may influence the amount you pick.



What exactly is it?

In the event of a covered claim, the deductible is the amount you are responsible to pay before the insurance company steps in and pays the remainder cost. The amount of your deductible is subtracted, or "deducted", from your total claim payment. The amount is shown on the declarations page of a standard policy. The deductible applies each time a claim is submitted.


Why does the amount matter?

The deductible amount matters because it's what you must pay before the insurance covers the rest. Deductibles are a way that you share risk with the insuring company. As a general rule, the higher your deductible means the lower your policy premium. Insurance companies love a larger deductible because that means you'll be paying out of pocket for what could have been a bigger claim. Since you're avoiding submitting small claims by paying out of pocket for any repairs, a higher deductible may help lower your renewal premium as your claim history should be lower.


What amount should you pick?

This answer is ultimately your decision. Consider your financial situation - what's a comfortable amount that you can afford to keep tucked away, untouched? For some people that may be $500, for some it may be $5,000. Whatever that amount is, make sure you have it for when you may need it.


How can we help?

As your insurance agent, we want to help you understand your policy. If you'd like to review your policy, change your deductible or have any other questions, give us a call: 845-255-7806.


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(845) 255-7806

58 North Chestnut Street

New Paltz, NY 12561

Monday - Friday: 9 AM - 5 PM

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