Understanding how your insurance deductible works is one of the many basic insurance “need to knows” for anyone who has an insurance policy.
Your insurance deductible is the amount you agree to pay in the event of a loss covered by your insurance company. For example: Let’s say your property was completely destroyed in a fire. Your insurance company is willing to cover the cost to rebuild up to your policy limits, but first you must pay your deductible.
For large apartment complexes and homeowner associations an insurance deductible is usually anywhere between 5,000 and 10,000 dollars depending on your specific circumstances.
Your deductible has a direct effect on your premium, usually the higher your deductible the lower your premium. Ultimately you want your deductible to be a price you or your association can afford in the event of a catastrophic loss.
Keep in mind that your insurance policy is not a maintenance program, small claims not only raise your premium in the years to follow but they can also get you non-renewed with your current insurance carrier.
It’s usually a better idea to take care of small losses out-of-pocket, this keeps your premium down and leaves an exemplary loss history with your current carrier. Using your insurance carrier to pay out on small losses can ultimately leave you at a financial loss.
Ultimately each loss should be carefully evaluated on a case by case basis with your current insurance carrier.