Hopefully you and your family survived the recent disastrous snow storm in Texas and are ready for Spring and Sunshine. One thing new I have learned from the storm is that many of my customers and probably you too, do not understand what the term “Deductible” means on your Homeowners Insurance policy. As I spoke with my customers regarding their insurance claims, it was a common occurrence for individuals to ask how much they where going to have to pay the Insurance company for repairs. Good thing I was not Zooming with these folks, because they would have seen a very peculiar “Hmm” look on my face.
You see, I realized that I am guilty of being an insider, and know what an insurance deductible is. In essence, I “Assumed”, no laughing please, that everyone understood. But many do not realize that the simplest definition of a deductible is “Self Insurance.” You see, your deductible is the portion of any loss (the cost to repair) that you agree to pay for, i.e. Self Insure. For example, if you have a $10,000 loss and your deductible (Self Insured Amount) is $2,000, your Insurance company will issue you a check for the difference between the loss and your deductible, or $8,000. A great way to prepare for an unexpected loss is to keep an amount equal to your homeowner insurance policy deductible tucked away. In the event you do have damage to your property, you will already have your “self insured” amount waiting and you won’t have any unexpected expenses. So, keep smiling and remember to keep your deductible for your portion of the loss!