Consumers’ product knowledge impacts their decision-making abilities. Purchasing something that is intangible, such as an agreement, can create obstacles in such clarity.
Often, insurance falls into the “mystic intangible” realm simply because it is something that must be learned, yet never explicitly taught. Pretty unfair, we get it. That’s why we are here. To kindly educate and serve.
Application of the Deductible
An insurance policy is a contract for coverage against monetary loss arising from a sudden and unexpected event. The deductible is the amount paid by the insured before insurance kicks in.
Example: Tree falls on car and the policy has $250 deductible
– Insured pays $250
– Insurance Company pays remainder of damage up to limit
Understanding your deductible is helpful to predict out of pocket costs per incident since they are not set to any specific “standard”. Deductibles are a variable option to the consumer as a prescribed limit and/or a percentage of loss.
Impact of the Deductible
Choosing the correct deductible (based on the liquidity of the insured) impacts the overall premium (Cost) of the policy. Selecting a high deductible will yield a lower premium, because the insurance company is relieved of payouts on minor incidents. A lower deductible (less out of pocket) comes with a higher premium. Finding the sweet spot for the customer delivers the best value with the needed coverage.
– HIGHER Deductible —————— LOWER Premium
– LOWER Deductible ——————- HIGHER Premium
Value of an Independent Agent
In all scenarios it behooves the customer to speak with an independent source. Find an agent that can listen and pivot to your scenario while offering a variety of companies. Their independence helps ensure that your placement is for your benefit, not just another sale.
