A standard component of any Michigan home insurance policy is the deductible. This refers to an amount that you are initially responsible for in the event of a claim. The insurance company then covers any due payout over the deductible amount. There are various ways that deductibles work with insurance policies.

As an example, if you are making a claim to have your $200,000 home rebuilt after a major hurricane and your insurance policy states your deductible amount is $500, then it means you are responsible for paying the first $500 with the insurance company paying the remaining $199,500. As a general rule, the higher your deductible amount, the lower your premiums will be.

Many insurance policies work with a flat-rate deductible, but if you are in a high-risk area (a coastal spot where hurricanes are frequent, for instance) then you may be required to pay a percentage-based deductible. This is typically around 1 percent. Using the same scenario of a $200,000 house, your initial payout would then be $2,000. It’s important to be clear on the size and type of your deductible, and confirm this each time your policy is due for renewal.

Should your insurance policy ask that you pay a percentage-based deductible, there are still ways you can save money on your Michigan home insurance. Combining policies – for instance, taking out car insurance with the same provider – is just one example. Always feel free to ask your agent for other ways that you might save. With PCIA, you can rely on our agency to get you the coverage you need for your home. If you have any more questions, don’t hesitate to contact us today!