We are often asked here at Preferred Insurance Center about the difference in Ohio insurance deductibles and are asked how to choose. The best way to explain a deductible has been asking our insured how much of the damage they would be willing to “absorb.” When we ask this, we are asking how much you would be willing to pay out of your pocket regarding repairs.
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On a home insurance policy:
Our options don’t start very low. Most of our companies are not offering a deductible lower than $1000. The companies have found that they are not covering so many of the smaller claims which allows their rates to remain pretty stable. The higher the deductible, the lower your premium.
As for the auto policy:
There are two different deductibles to consider. The collision deductible would cover moving accidents that you cause and would repair your vehicle. These deductibles start as low as $100 and go as high for some companies to $5000. Again, the question remains of how much you would absorb. The higher the deductible, the lower the premium but that might not be practical with auto. If you are in an at-fault-accident and had to repair your vehicle but repairs only came to $500, is that something you would expect insurance to repair? If so, then a lower deductible would be a good idea. Most of our clients have deductibles around $500 as they would turn in a claim over that amount. Again, these are for at-fault-accidents. If the other party is at fault, their company would handle the repairs and your deductible would not apply.
The other deductible on an auto policy is the comprehensive or other than collision deductible. This coverage is for, surprise, anything other than collision! What are some comprehensive coverage’s you may ask? Some examples include, fire, wind, tree branches, glass claims and deer. You may have also heard some of these referred to as “acts of God.” They are considered things that you have no control over. These deductibles can start as low as $0 for some of our companies and increase again with some companies to $5000. When asked about this deductible, we usually suggest that they remain fairly low. If you have a windshield that cracked for example, a windshield for most vehicles are not more than $250-300 and having a $500 comprehensive deductible would not help in this case. On the other hand, damage from deer, fire and tree branches can cause quite significant damage where a $500 deductible wouldn’t be such a bad thing.
If there is a loan on a vehicle that you own, your bank will likely require that you carry both comprehensive and collision deductibles that are not over $1000 to satisfy the loan. We like to remind people of that when they are thinking of purchasing a new vehicle.
The choice is yours!
Ultimately, the choice is yours when it comes to deductibles but this information should help you to make an informed decision. We also bring them up during our account review as a way to decrease the premium for the renewal term. We are more than happy to assist you with deductible questions on your current home or auto policies so don’t hesitate to ask!
Andrea AbouJaoude | Service Specialist