How A Buyback Deductible Works With Home Insurance

One of the most common ways people reduce the premiums on their homeowner's insurance plans is by raising their deductibles. Having a higher deductible is always going to result in a lower premium on the policy, but having a higher deductible is not very beneficial if you ever need to file a claim. There is a way to protect yourself in this, though, and that is by choosing a buyback deductible with your policy.

What is a buyback deductible?

A buyback deductible is a very unique feature of a homeowner's insurance policy, and this feature is not only designed for home insurance. It may also be available with other types of insurance policies as well. When you have this feature, you have a high deductible on your insurance policy, which means you pay lower rates for your coverage. If you experience a time when you have to file a claim, you will not have to pay the full amount of the high deductible that you have, though, if you have a buyback deductible. Instead, you will pay a fee to have a lower deductible to pay for your claim. In other words, a buyback deductible lets you have a lower deductible when you need it the most.

How does it work when you file a claim?

When you have a buyback deductible, you basically would never want to file a claim for a small amount, as this would not benefit you or make sense. It would only be something you would use if you had a major claim, such as an entire loss of your house. When something like this happens, you would pay the extra fee for the buyback deductible and you would not have to pay the full deductible of your policy. It is somewhat confusing as to how this works, but an insurance agent can explain it to you if you have further questions.

What are the costs of this?

As with all insurance types and kinds, the costs for having a buyback deductible varies. The amount you must pay for it will depend on a lot of different factors, and an agency can give you a quote if you are interested in learning more about how buyback deductibles work. If you have further questions, call an insurance agency in your city to learn more or to get a quote for home insurance coverage for your home.

For more information, contact a homeowner's insurance provider.