Understanding Deductible Insurance: What It Is and How It Can Help

What Is a Deductible?

An insurance deductible is the amount of money you must pay out-of-pocket before your insurance coverage starts to pay for a claim. It’s a key feature of most types of insurance policies, including auto and homeowner's insurance.

Here's how it works:

1. Before Insurance Kicks In: When you file a claim, you first need to pay the deductible amount. Once you've covered this amount, your insurer will start covering the remaining costs according to the terms of your policy.

   • For example, if your auto insurance policy has a $1,000 deductible and you file a claim for $5,000 worth of damages, you would pay the first $1,000. After that, your insurance would cover the remaining $4,000.

2. Fixed Amount: Deductibles are typically a fixed amount, like $500, $1,000, or even more. The amount can vary depending on your policy and insurer.

3. Higher Deductibles = Lower Premiums: Generally, the higher your deductible, the lower your monthly insurance premiums (the amount you pay regularly for the policy). This is because you’re agreeing to pay more out-of-pocket in the event of a claim, which reduces the insurer's risk.

4. Types of Insurance with Deductibles: Deductibles can apply to various types of insurance, including:

   • Auto Insurance: The amount you pay after an accident or vehicle damage.

   • Homeowners Insurance: The amount you pay for damage to your property, like from a fire or storm.

Why Do Deductibles Exist?

Deductibles are designed to reduce the number of small, low-cost claims. By requiring you to pay a portion of the cost, insurers can keep premiums (the amount you pay for coverage) lower. Essentially, you’re sharing the risk with your insurer. The higher your deductible, the lower your premium typically is, and vice versa.

While deductibles are a standard part of most insurance policies, they can sometimes be a financial burden, especially if you’re faced with a large, unexpected claim. This is where deductible insurance comes in.

How Deductible Insurance Can Help with Deductible Costs

Deductible Insurance is a product that’s designed to assist policyholders in managing their deductible expenses. It works alongside your traditional insurance policy, providing a safety net to help cover your deductible costs in the event of a claim. Here's how it works:

• Reduced Out-of-Pocket Costs: If you file a claim, deductible insurance can cover the cost of your deductible, meaning you won’t have to pay that lump sum upfront.

• Peace of Mind: With deductible insurance, you won’t have to worry about how you'll cover your deductible in an emergency. This is especially beneficial for those who may struggle with unexpected expenses.

• Easy to Add: Products like AssurancePlus are typically easy to add to your existing insurance plan. They offer an affordable way to enhance your coverage without overcomplicating things.

Why Consider AssurancePlus?

There are several reasons why AssurancePlus might be a good option for people who are looking to manage their deductible expenses:

1. Affordability: AssurancePlus is often priced reasonably, giving you the peace of mind that you’re protected without adding too much to your monthly insurance premiums.

2. Flexibility: Whether you have auto insurance, homeowner's insurance, or both, you can find a plan that suits your needs and complements your existing coverage.

3. Convenience: Having a product like AssurancePlus means you don’t need to worry about coming up with a large sum of money out of pocket in the event of an emergency.

Is Deductible Insurance Right for You?

While deductible insurance products like AssurancePlus can be a great addition to your insurance policy, it’s not for everyone. Here are a few things to consider before deciding:

• Assess Your Financial Situation: If you have a solid emergency fund and can comfortably pay your deductible in the event of a claim, you might not need an additional product.

• Understand Your Insurance Needs: Look at the type of insurance you have and how likely you are to file a claim.

• Evaluate the Cost vs. Benefit: Consider whether the cost of deductible insurance outweighs the benefit it provides. If your deductible is relatively low, you may not need this extra coverage.

Final Thoughts

Deductible insurance, while often overlooked, plays a critical role in how much you pay for insurance. Understanding how deductibles work and what options are available to help you manage them can make a big difference in your financial security. Products like AssurancePlus offer an extra layer of protection, giving you peace of mind when it comes to covering your deductible.

Before choosing whether deductible insurance is right for you, take time to assess your needs and budget. In the end, having the right coverage can help you avoid unexpected financial strain and ensure that you’re adequately protected when life throws you a curveball.

Considering Deductible Insurance for Yourself?

At Jones Prairie Insurance Services, we work with AssurancePlus to provide deductible insurance policies of $1,000 for your Auto Insurance, Home Insurance, or both. Interested in learning more? Contact us today!