It’s no secret that the insurance industry is rapidly changing everyday. At Harmoning Agency, we firmly believe in our mission of our customers knowing what they are buying. A new series of questions that has come to the forefront of many customer conversations is around the topic of percentage deductibles. To help continue educating our customers and others, let’s dig more into this and how it can impact you, our family and maybe even your business.
What are Percentage Deductibles?
When defined, percentage deductible is the percentage of the total value of the building insured. Let’s look at a scenario to help provide clarity around it: Say that you have a 3% deductible on your coverage but you have a $2,500 deductible on the rest of your property. The deductible is not on the amount of the claim, it is on the amount of the replacement cost of the building that you are insuring. So a $300,000 house with a 3% deductible is a $9,000 deductible on that hail plan. This is something that you need to be aware of and plan for because it could really affect you when you have a claim.
How Could Percentage Deductibles Impact Me?
Percentage deductibles are coming out in the property side of the insurance industry a lot more than it ever used to. We are seeing, especially on wind and hail coverages, for homes but also farmsites and commercial property coverages that percentage deductibles are put into place. In the example of the $300,000 home and needing $9,000 deductible for a hail claim, this is something families need to plan for. This coverage is unlike the stereotypical deductible that requires a flat fee that remains the same no matter the damage occurred.
The Harmoning Agency is Here to Help!
As licensed insurance agents, we understand the importance of finding the coverage that you need and how new regulations and standards can create confusion in the industry. At the Harmoning Agency, we are here to help. Contact us today to review the options available for you and your family’s needs. With access to multiple companies, many lines of insurance and a lot of options, we will help find the perfect fit for you.