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How Do I Know What Deductible I Want On My Insurance?

By April 3, 2023Insurance

When it comes to insurance, one of the most important decisions you’ll make is choosing a deductible. This is the amount of money you’ll pay out of pocket before your insurance kicks in to cover the rest. It’s important to choose a deductible that works for your budget and your level of risk.

But how do you know what deductible to choose? A good rule of thumb is to choose a deductible that you can afford to pay three times over without it affecting your day-to-day operations.

If you choose a deductible that you can’t afford to pay three times over, you run the risk of being unable to cover the cost of multiple claims. This could put your business in a difficult financial situation. If you had three claims that matched your deductible, and you could afford to pay for all of them without it affecting your business, then that deductible is a good fit for you.

For example, let’s say your deductible is $5,000. If you had three claims that each cost $5,000, you’d need to be able to cover $15,000 out of pocket without it hurting your business. If you can’t afford that, then you might want to consider a lower deductible.

On the other hand, if you choose a deductible that you can easily afford to pay three times over, you’ll have peace of mind knowing that you’re prepared for whatever comes your way. You’ll also likely pay less for your insurance premiums, since higher deductibles typically come with lower premiums.

This rule of thumb isn’t perfect for every business. Every company has its own unique financial situation, and what works for one business might not work for another.

That’s why it’s important to talk to an insurance professional who can help you choose the right deductible for your business. We take into account factors like your budget, your level of risk, and your past claims history to help you make an informed decision.

Contact us today for any questions or concerns when it comes to choosing the right deductible.