Many homeowners in Texas are paying high premium rates for homeowners insurance. If you are included in this group, you may be looking for a way to reduce the cost of your insurance. Your premium may be paid through your mortgage payment, semi-annually out of your pocket, monthly or in another fashion, and you may think that the cost is becoming burdensome. One of the best ways to control your homeowners insurance premium is by adjusting the deductible. However, a deductible adjustment is not always ideal. Before you make the decision to adjust your deducible, consider these points https://www.texasquotes.com/homeowners-insurance/.
What Happens When You Raise Your Deductible
Your deductible amount is directly linked to your premium. A typical deductible amount for homeowners insurance in Texas is one percent of the replacement value of the home, but you may choose to increase this to two percent or to a flat dollar amount, such as $2,500 or $5,000. When you increase your deductible higher than what it currently is, the premium amount will decrease. The premium is typically quoted to you in an annual figure, such as $1,000 per year. When you speak with your homeowners insurance agent about increasing the deductible, you will be able to determine how much annual savings on the premium you can enjoy by doing so.
The Difference Between the Deductible and the Premium
Before you make the decision to adjust your homeowners insurance deductible, it is important to understand the difference between these two figures. The deductible is an expense that you will only be responsible for if you need to file a claim. Some homeowners may go several years without filing a claim, but others may need to file a claim multiple times in a given year. Each time you file a claim, the deductible is due. The premium, on the other hand, is the cost of owning the policy, and it is the regular expense that you are responsible for regardless of whether you file a claim or not.
If You Choose to Raise Your Deductible
Before you make the decision to raise your homeowners insurance deductible, ensure that it is affordable for you to pay. You generally will have no advance warning of a disaster that may strike that may result in the need to file a claim. Because of this, it is helpful to have access to the full amount of the deductible in a savings account so that it is readily available when needed. Because you may need to file two or three claims in a year in some unfortunate cases, it can be helpful to keep two or three times your deductible amount in savings. This way, you can always file a claim when needed.
Other Ways to Save Money on Homeowners Insurance in Texas
Raising your deductible is just one of the many options available to save money on homeowners insurance. If you are not comfortable raising your deductible, you may consider using other options to lower your premium. For example, you could bundle your auto insurance with your homeowners insurance policy. You could also take advantage of homeowners insurance discounts or adjust your coverage amounts. These are only a few of the many options available for lowering your premium. Some will combine each of these ideas together as well as lower their deductible for the maximum savings possible.
Increasing your deductible is an effective way to save money on your premium, but it is not an ideal option for everyone. Carefully weigh the pros and cons associated with this before deciding how to proceed.