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When you are discussing the terms of your home insurance coverage, you must choose a deductible. Before you settle on a high or low option, it's important to understand the advantages of each.
Your first reaction may be to wonder why you would ever want to pay more of the costs for repairing water damage than you have to pay. High deductibles actually come with a few perks:
-Lower monthly premiums
-Greater motivation to avoid claims
-More control over finances
Every claim you make has the potential to raise your premiums or affect your home insurance coverage. When you agree to cover more of the cost restoration services in Breckenridge, CO yourself, you can reduce your reliance on your provider. If you routinely have enough in savings to cover the cost of a high deductible, the advantages may make it worthwhile.
A low deductible provides more security, particularly for those who don't have a lot of savings. A 3rd party billing company may help identify how much your policy covers, but a large deductible can still be daunting. If you are living paycheck to paycheck, having to pay a large sum out of pocket for restoration services may utterly deplete what little reserves you have. You may even have to take out a loan to cover the necessary costs. Consider the impact that having to pay your deductible amount all at once is likely to have on your finances. If that thought makes you panic a little or you can't imagine how you would manage it, you should probably opt for a smaller deductible. It will raise your monthly premium, but that may be easier to fit into the budget than one huge windfall.
The same deductible isn't right for everyone. Your final decision comes down to how much you want or need to depend on your home insurance provider in the event of a disaster.
