Deducing the Difference Between Deductibles

Deducing the Difference Between Deductibles


A deductible is a set amount of money that you must pay each year before your insurance company will begin to pay for claims. Deductibles come in many shapes and sizes, but they all work in the same way. Understanding the different types of deductibles, how they work, and how they affect your policy can help you make an informed decision when it comes to selecting the right insurance policy for your needs.

The Primary Types of Deductibles

There are three main types of deductibles—fixed dollar, percentage-based, and variable—and each has its own unique features. Let’s explore them in more detail.


Fixed Dollar Deductible

A fixed dollar deductible is a pre-determined amount that is charged per claim or incident. This kind of deductible does not change from year to year and typically ranges from $50-$1,000 depending on the type of policy you have purchased. The advantage of this type of deductible is that you know exactly what you will owe if there’s a claim or incident, regardless of how much it costs to repair or replace damaged property or items in the event of an accident or other mishap.


Percentage-Based Deductible

Percentage-based deductibles are calculated as a percentage of the total value insured under a policy and usually range from 1%-10%. For example, if your belongings are insured under your homeowner's policy for $100,000 and you have chosen a 2% deductible then you would be responsible for paying $2,000 out-of-pocket before your insurance coverage kicks in. The higher the percentage rate, the lower your premiums will be but also keep in mind that any future claims may end up costing more due to having to meet a higher threshold before receiving coverage payments from your insurance company.


Variable Deductible

Variable deductibles are based on certain factors such as age or income level and can change over time as these factors change over time as well! For example, if someone’s income increases then their variable deductible may increase as well since their ability to pay out-of-pocket has increased with their income growth rate. This type of deductible gives customers more flexibility when it comes to choosing their coverage options and allows them to adjust their coverage amounts according to their individual needs.


No matter which type of deductible you choose for your insurance policy—fixed dollar, percentage based or variable—it’s important to understand how these different types work so that you can make an informed decision about which option best suits your needs as well as budget constraints. An experienced public claims adjuster in central Florida can help assess your situation and provide guidance on which type may be best suited for you so that you can rest assured knowing that whatever happens; you will be adequately covered!  That said understanding key differences between different types deductions can help ensure customers get maximum protection at minimal cost while also making sure they don't overpay for unnecessary coverage levels given specific situation at hand! By taking time to understand these differences customers can make smart decisions when it comes time select right balance between protection & cost savings given particular circumstances!  With the right information at hand customers can rest assured knowing they have appropriate level protection without worrying too much about potential financial burden!  

Ultra has over 39 years experience handling property damage insurance claims all working together professionally to provide our clients with the best service available from start to finish. Contact us and let us help you ensure your Maximum Recovery today.

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