What happens if you file a claim and have to pay a deductible?
That amount you’ve been earning the last few years will be subtracted from the deductible amount you owe.
Let’s put it into perspective: the siding of your home blew off due to a windstorm and you need to file a claim to repair the damages. The cost to repair the siding is $5,000, but before your insurance kicks in to cover the cost, you have to pay your $1,000 windstorm or hail deductible. You were planning on renovating your kitchen this year and aren’t happy about handing over a $1,000 deductible before your insurance pays to cover the damage — and thankfully, now you don’t have to.
Since this is the first homeowners insurance claim you’ve filed in six years, you’ve earned a $700 Diminishing Deductible amount and knocked your deductible amount to $300. Now you’ll only have to pay $300 before your insurance kicks in to cover the remaining $4,700.
So what’s the catch?
There isn’t one! We want to help you be more comfortable and prepared with the out-of-pocket costs that come with filing a home insurance claim. This new coverage is a way to proactively manage the financial hits that can come with the unexpected.
Once you’ve paid to add this coverage to your homeowners policy, you’ll continue to earn a lower deductible each year up to your policy maximum.
If it’s ten years down the road and you still haven’t filed a claim, that reward will stay put until you need to use it. Just make sure you don’t let your policy lapse for more than 60 days, cancel your policy or remove this coverage from your policy since you won’t be able to get the accumulated amount back.