"This policy contains a clause which may limit the amount payable." A lot of people see this phrase and do not know exactly what it means. Almost all home insurance policies include this phrase somewhere on page one.
They are talking about the deductible on the policy. Deductibles are a part of almost every policy, and the holder must cover this cost. The amount of the deductible will vary depending on the loss that is incurred. A deductible is the amount of loss paid by the policy holder before any loss is paid by the insurer. The larger the deductible, the lower the premium.
A policy may have different deductibles based on the peril of the loss. The most common types of deductible are:
Glass breakage deductibles that protect the home owner from the costs incurred when replacing glass which is part of the policy holder's residence. Paying a slightly higher premium rate will generally make it so the home owner doesn't have to pay this deductible.
Earthquake deductibles are for earthquake damage to the home. Typically, you get to choose from a few different earthquake deductible options. The options are based on a percentage of the total limit of property covered under your condo insurance policy.
Crime deductibles cover theft, vandalism, burglary, and mysterious disappearance claims. In most cases this deductible is something that is only for vacation and rental property. Most deductibles are usually either $5,000 or $10,000, depending on the needs of the policy holder.
Water deductibles are for water related damage claims, and these are generally for rentals and vacation homes. You can usually choose from two deductible options, which are $2,500 to $5,000.
Standard policy deductibles refer to different forms of loss and damage that are not specifically listed. For most policies, the home owner can choose in the range of $500 to $5,000, whichever makes the most sense for the policy holder.
Premiums are kept low by having deductibles, which will stop a home owner from making minimal damage claims. For an insurance company, this keeps their payments down, and they charge less for premiums because of this.
If you have a low deductible you may be tempted to make claims on very small losses. When these minimal claims are made, the home owner will typically lose their "claims free discount". Base rates for the homeowner could rise after several smaller claims, and this could be actually more expensive than to repair or replace the damages on your own. Home owners who make claims too often sometimes find the insurance company refusing to renew their insurance.
Premiums will be much lower when the home owner makes the decision to have a higher deductible. The main reason to get insurance is to be protected from major losses like fires, water damages, burglary, or windstorms, not to make small claims when there isn't much damage involved. Having a higher deductible is wise because of the reasons stated here. Premiums will be lower when you repair or replace small damage or loss on your own, and overall, your costs will be lower. If a time comes when insurance will be needed, your policy will have you covered.
They are talking about the deductible on the policy. Deductibles are a part of almost every policy, and the holder must cover this cost. The amount of the deductible will vary depending on the loss that is incurred. A deductible is the amount of loss paid by the policy holder before any loss is paid by the insurer. The larger the deductible, the lower the premium.
A policy may have different deductibles based on the peril of the loss. The most common types of deductible are:
Glass breakage deductibles that protect the home owner from the costs incurred when replacing glass which is part of the policy holder's residence. Paying a slightly higher premium rate will generally make it so the home owner doesn't have to pay this deductible.
Earthquake deductibles are for earthquake damage to the home. Typically, you get to choose from a few different earthquake deductible options. The options are based on a percentage of the total limit of property covered under your condo insurance policy.
Crime deductibles cover theft, vandalism, burglary, and mysterious disappearance claims. In most cases this deductible is something that is only for vacation and rental property. Most deductibles are usually either $5,000 or $10,000, depending on the needs of the policy holder.
Water deductibles are for water related damage claims, and these are generally for rentals and vacation homes. You can usually choose from two deductible options, which are $2,500 to $5,000.
Standard policy deductibles refer to different forms of loss and damage that are not specifically listed. For most policies, the home owner can choose in the range of $500 to $5,000, whichever makes the most sense for the policy holder.
Premiums are kept low by having deductibles, which will stop a home owner from making minimal damage claims. For an insurance company, this keeps their payments down, and they charge less for premiums because of this.
If you have a low deductible you may be tempted to make claims on very small losses. When these minimal claims are made, the home owner will typically lose their "claims free discount". Base rates for the homeowner could rise after several smaller claims, and this could be actually more expensive than to repair or replace the damages on your own. Home owners who make claims too often sometimes find the insurance company refusing to renew their insurance.
Premiums will be much lower when the home owner makes the decision to have a higher deductible. The main reason to get insurance is to be protected from major losses like fires, water damages, burglary, or windstorms, not to make small claims when there isn't much damage involved. Having a higher deductible is wise because of the reasons stated here. Premiums will be lower when you repair or replace small damage or loss on your own, and overall, your costs will be lower. If a time comes when insurance will be needed, your policy will have you covered.
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