What’s worth knowing about your home insurance deductible in Ontario

As important as it is to understand how much your home insurance policy will cost you up front, it’s just as important to consider what it will cost in the event of a claim. This is why you need to understand the concept of the deductible by definition.

The home insurance deductible definition

Your insurance deductible is the portion of an insurance claim you agree to pay on your own, and your insurance company will pick up the rest. Generally speaking, the higher the deductible you choose, the lower your insurance cost will be. It can be very tempting at the time of purchasing your policy because we all want to pay less for our home insurance; however, it’s important that you set your deductibles to an amount that you can comfortably manage in order to avoid complications.

Consider these things before you choose.

What does your bank account look like (honestly)?

If you’re the type that typically has a few thousand dollars sitting around as a “rainy day” fund, then a higher deductible may be a suitable option. This will provide you with an opportunity to save a bit on your home insurance costs, too.

An important fact to keep in mind is that your home insurance deductible is typically treated differently from your car insurance deductible. So if you opt for a $2,500.00 deductible on your home insurance and the same on your car insurance, then you should have a safety net of $5,000.

For example, if your car accidentally caused damage to your home while attempting to pull into your driveway, that would be an example of both home and car damage occurring at the same time.

What are the chances you’ll need to pay a claim?

Unless you have a crystal ball that predicts the future, this is one of those impossible questions to answer with any certainty. Just remember that you’ll always have to pay a deductible (by definition) whenever you file a claim. It will depend on the deductible agreed upon in your claim.

You’ll have to rely on history, and you can start with the history of your neighbourhood. If you’ve just moved in, it might be a good idea to chat with your neighbours to find out if the area experiences any regular flooding, storms, or even burglaries that might increase the chances of filing a claim in the future.

The deductible choice is yours

Some people select lower deductibles, so their out-of-pocket expenses are minimal at the time of a claim should one occur. However, if you’ve been fortunate to have never submitted a claim or have rarely needed to, and you can afford the higher deductible, then it may help lower your annual home insurance costs.

When you purchase your policy, you can review your options with your broker and make a decision that suits your budget and lifestyle.

As important as it is to understand how much your home insurance policy will cost you up front, it’s just as important to consider what it will cost in the event of a claim. This is why you need to understand the concept of the deductible by definition.

The home insurance deductible definition

Your insurance deductible is the portion of an insurance claim you agree to pay on your own, and your insurance company will pick up the rest. Generally speaking, the higher the deductible you choose, the lower your insurance cost will be. It can be very tempting at the time of purchasing your policy because we all want to pay less for our home insurance; however, it’s important that you set your deductibles to an amount that you can comfortably manage in order to avoid complications.

Consider these things before you choose.

"100% less insurancey. Low guaranteed car insurance rates!" Beside an image of two pink lawn flamingos above the aha insurance logo.

What does your bank account look like (honestly)?

If you’re the type that typically has a few thousand dollars sitting around as a “rainy day” fund, then a higher deductible may be a suitable option. This will provide you with an opportunity to save a bit on your home insurance costs, too.

An important fact to keep in mind is that your home insurance deductible is typically treated differently from your car insurance deductible. So if you opt for a $2,500.00 deductible on your home insurance and the same on your car insurance, then you should have a safety net of $5,000.

For example, if your car accidentally caused damage to your home while attempting to pull into your driveway, that would be an example of both home and car damage occurring at the same time.

What are the chances you’ll need to pay a claim?

Unless you have a crystal ball that predicts the future, this is one of those impossible questions to answer with any certainty. Just remember that you’ll always have to pay a deductible (by definition) whenever you file a claim. It will depend on the deductible agreed upon in your claim.

"You'll be done in 3 minutes. It's easy! Get low car insurance rates" beside a hand holding a pocket watch, above the aha insurance logo with icons for car and home insurance.

You’ll have to rely on history, and you can start with the history of your neighbourhood. If you’ve just moved in, it might be a good idea to chat with your neighbours to find out if the area experiences any regular flooding, storms, or even burglaries that might increase the chances of filing a claim in the future.

The deductible choice is yours

Some people select lower deductibles, so their out-of-pocket expenses are minimal at the time of a claim should one occur. However, if you’ve been fortunate to have never submitted a claim or have rarely needed to, and you can afford the higher deductible, then it may help lower your annual home insurance costs.

When you purchase your policy, you can review your options with your broker and make a decision that suits your budget and lifestyle.

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