Make sure you know what you need...

The final issue from the Philadelphia Inquirer article by Jeff Gelles addresses the issue of your deductible. This is the amount you pay in the event you have a loss. In the past, most carriers offered what is called a “flat deductible.” This means that it is a specific amount, i.e. $500 or $1,000.

“…the biggest pitfall he’s seen lately is the spread of the percentage-based deductibles, often imposed for certain kinds of damage such as windstorms.”

The percentage deductible is not a percentage of the amount of the loss but a percentage of the value of your home. This means that is you have a $300,000 and a 2% deductible; you would pay $6,000 in the event of a loss.

Insurance is the third largest expense in a household. Make sure you know what you need. Make sure you understand more than just the cost of the coverage. Make sure your coverage does what you what it to do when you need it to do it. Insurance isn’t what you pay. It is what you buy.