Deductibles are the part of insurance that people often forget about until they file a claim. Some people confuse a “low deductible” with a lower monthly premium, which is not the case. Here are important points to know about deductibles and how they affect general liability insurance in North Carolina:
What Is a Deductible?
The deductible is the amount you pay first with your own money before the policy kicks in to pay the balance. A deductible affects the amount you pay for your monthly general liability insurance in North Carolina. Deductibles represent shared risks between the policyholder and the insurance agency.
Deductibles function as a protective shield for insurers and as a deterrent for people filing unnecessary claims. Paying a certain amount of your own money shows you are serious about the claim.
Do Deductibles Apply to All Types of Policies?
Most types of small business insurance plans include a deductible. You can find it in auto insurance, commercial property, and professional liability plans. Some policies allow you to set the deductible as low as zero when you file a claim, but you’ll pay a higher monthly premium in return. Most business owners, though, choose to pay a deductible.
If you have multiple policies under the same insurer, ask if you can bundle the policies together at a bargain price. Chances are, each plan has a deductible that you can adjust.
How Deductibles Works?
When you file an insurance claim to pay for repair or replacement of a damaged possession, an insurance adjuster investigates the issue. First, the adjuster estimates the cost to fix the damage. As an example, let’s say the damage is $3,000, and your deductible is $500. That means you’ll pay the first $500 to fix the problem, and then the insurer will cover $2,500. This process works the same way across all states and various policies, including general liability insurance in North Carolina.
Who Determines Your Deductible?
You and your insurer determine your deductible based on whether you want to pay more monthly or at the time you file a claim. The more you pay monthly, the less you’ll pay later, just as the less you pay monthly, the more you’ll pay later. The insurer can advise you on how to handle the risks associated with your business. Insurers track all types of disasters and have plenty of statistics to share with customers to verify the dangers of specific activities.
Some insurance agencies start with a minimum deductible and give you a higher-priced option according to your preferences. Another way of looking at your choice is the less you pay monthly, the more risk you assume down the road. Ultimately, you decide on your insurance coverage, so you have the final decision on your deductible.
Can One Insurance Policy Have Multiple Types of Deductibles?
Yes, it’s possible to have three types of deductibles on some policies. One model is the fixed deductible, in which each loss is associated with a fixed dollar amount. Another model is the percentage deductible, in which a disaster leads to a policyholder paying a percentage of the asset’s total value. A waiting-period deductible involves waiting to receive business interruption coverage.
Getting general liability insurance in North Carolina is the right choice for many small businesses. Make sure you understand what your deductible payment will be when it’s time to file a claim. Contact us at Pittman Insurance Group, LLC for more information about deductibles and insurance plans.