We are constantly looking for new ways to help customers increase the affordability and choice of Homeowners insurance. That’s why some of the companies we represent are introducing percent deductibles. These deductibles are a percentage of the insurance limit on the dwelling or coverage A.
Percent deductibles allow you the customer to select a separate deductible amount that can apply to losses due to wind or hail, or they can choose a percentage deductible that covers all perils.
For example, a customer calls to get insurance for his family’s $175,000 home. He’s given the following options:
Flat $500 deductible
Split $1,000/1% wind/hail deductible
1% all-peril deductible
If the customer chooses the Split $1,000/1% wind hail deductible, the deductible for a wind/hail claim would be $1,750 (one percent of $175,000). For other covered property losses, the deductible would be $1,000.
For the 1% all-peril deductible, the deductible would be $1,750 for all perils.
With the new percent deductibles, customers will see significant savings on their monthly premiums. Check out the savings for a typical home with $175,000 of insurance. These savings are average numbers (individual policy premium savings will vary).
Using the above example the saving would be 16.5% over a $500 deductible and almost 20% using the 1% option.
Remember that most home policies in California have a substanially higher dwelling coverage due to the cost of real estate and construction, but the saving are the same. Just be cautious of the deductable amount.
We are already having success with these deductibles. Information is the key in keeping you insurance cost down. By letting customers know that they can have significant savings on their premiums with these new deductibles, A lot of my customer already appreciate the higher deductibles offered and the saving by taking advantage of our multiple deductibles already available. It doesn’t take long for customers to learn this lesson and keep premium dollars in their pocket but stay covered for the big major problems. Alleviating the claims surcharges that go into effect the following renewal period and stay on your record for as long as 3 years.
The percentage deductibles can also help guard customers against inflation. Since the percentage is tied to the limit of insurance on their home, it will help keep their rates stable over time.
These percentage deductibles can give you more options for tailoring the Homeowners policy to fit your insurance needs. You can save premium dollars that you can then use to add new coverage or increase current ones. Add much needed Life Insurance or last week a customer save enough to pay for a one million dollar personal liability umbrella policy every year.
Give us a call if you have questions or want to discuss your present coverage. 1-760-471-1312 1-888-471-FIRM (3476) or [email protected].