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Balancing Premium, Deductible, Coverage, and Claims

By July 16, 2021Insurance

Balancing Premium, Deductible, Coverage, and Claims: 

Premium, deductible, coverage, and claims: The Mount Rushmore of insurance terms. Understanding these common insurance terms will go a long way toward making insurance simple. However, understanding the balance between these terms is pivotal for finding an insurance option that best suits your specific needs.

Now I know what you are thinking. I will get a policy that has a low premium, low deductible, a high amount of coverage, and I will never file a claim! Unfortunately, it will not be that easy. Insurance policies typically balance coverage, premium, and deductible. Claims are the wildcard that distorts the equation. Generally, lower premiums equal higher deductibles and lower deductibles equal higher premiums. To have low premiums and deductibles you will generally have lower quality coverage options. Higher quality coverage options usually bring with them higher premiums and deductibles. Depending on your insurance needs you may want to forgo higher coverage, premiums, and deductibles. For example, if you are a healthy young adult who is rarely sick. You should consider a health plan that is geared toward emergencies. Remember you never know when emergencies will happen.

On the other hand, homeowners who entertain a lot of guests throughout the year may want to purchase a home policy with special event coverage. Extended coverage options are more expensive, but they offer more protection. Claims throw a bit of a monkey wrench in the equation. A higher claim history means an insurance carrier may opt to charge more for the same coverage options. For example, if you’ve been in several car accidents that resulted in you filing a claim, insurance companies are likely to charge you a higher premium for all coverage options.

Independent Insurance Agents 

There are certified independent insurance agents that can help you find the policy that is the best fit for your needs. If you have questions or concerns about your coverage and potential options contact us at Konen Insurance and we can help to make shopping and purchasing a policy simple and easy.

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