When it comes to your insurance coverage, there might be a few words that you aren’t clear on. It is important that you understand some of these terms to ensure you have the coverage you need whether it is your auto insurance, homeowners insurance, or renter’s insurance. There are three terms that you are definitely going to want to understand and those are insurance premiums, insurance deductibles and insurance policy limits. InsureWise is here to talk about what these three terms mean so you can better understand your insurance policy.
How is Insurance Policy Limit Determined?
Your insurance policy limit is something that you definitely want to understand. This is the amount of money your insurance company is willing to pay out in the case that you need to make a claim. If the claim that you’re making exceeds this amount, you will more than likely be responsible for paying that amount out of pocket. You never want to find yourself in a position that you are underinsured. Sometimes, working with a professional insurance broker can help ensure you aren’t underinsured so you have the coverage you need in the event that you need to use your policy.
How Does an Insurance Deductible Work?
If you have an insurance deductible, that means that when you submit a claim, you will be responsible for a portion of that claim before your insurance company will pay anything. For instance, if you get in a car accident and have a $500 deductible, you will have to pay that money before they will pay the remaining balance of the cost of damages. Some people don’t mind paying a deductible because that means they don’t have to pay as much on their policy. You have to weigh the pros and cons that come with a higher or lower deductible to decide what is best for you.
What Does Insurance Premium Mean?
When someone refers to your insurance premium, they are referring to the amount of money you pay for your coverage. This could be paid monthly, quarterly, semi-annually or even annually. The amount of money you pay for your insurance premium is going to depend on the coverage noted in your policy. If you aren’t asking for much coverage, you are going to pay a lower premium. However, this isn’t wise in the case that you actually have to use the coverage and caught without the coverage that you need. You need to find that fine balance of not overpaying for your insurance, but not finding yourself underinsured as well.
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If you are in need of insurance of any kind, you can turn to the professionals at InsureWise to help you find the right policy for your needs. We know how important it is to have the right policy in place just in case you find you need to make a claim for any reason. Call us today or click here to submit a quick and easy quote form.