Which deductible is better

If you have a clean driving record or live in a low-traffic city, getting a high deductible could save you more money in the long run. At the end of the day, the best option is the one that works for your current financial situation. The same inverse relationship applies when it comes to the deductible and the premium amounts for homeowners insurance. As a homeowner, however, your insurance deductible might be a percentage of your total coverage, a specific dollar amount or a hybrid of the two, depending on the type of claim.

As with car insurance, you would only pay a deductible if you file a claim. Because hurricanes, earthquakes and flooding often require additional coverage on top of a standard insurance policy, it's best to inquire with your insurance rep for more information as rules may vary from state to state.

Your monthly premium isn't exclusively determined by the deductible you choose to pay. There are a few other important factors that insurance companies will take into account, including:. Your insurance needs may vary from one year to the next. To find the product that's best for you, consider getting the help of an independent insurance agent. Connect with us to find your next insurance policy.

Customer Agent And vice versa: a high monthly premium might result in some sticker shock, but it typically has a lower deductible. This could be a better option for someone who will be spending more money on health care over the course of a year.

Read on to understand how to choose the option that makes the most sense for you. A deductible is the amount of money you must spend on covered health care expenses before your health insurance plan begins to cover any costs. Certain services are often provided through your health plan without additional costs, such as preventive care like annual checkups. These would therefore not contribute to meeting your deductible. Although it varies by plan, covered office visits and prescription drugs usually count towards a deductible.

A premium is the set fee you pay each month to be covered under a health insurance policy, regardless of whether you used health services that month or not. Even once you meet your deductible and out-of-pocket maximum, you must still continue paying the monthly premium in order to receive coverage.

The premium typically does not count toward the deductible nor the out-of-pocket maximum. Typically, lower deductibles translate to higher monthly premiums, while a higher deductible means a lower insurance premium. Select your product. Subscribe to our blog. Sound familiar? Which type of health plan is right for me? Who should choose an HDHP? Individuals Due to the higher out-of-pocket maximums that come with HDHPs, this type of plan is best for healthy individuals who expect little to no health care expenses.

Who should choose an LDHP? Summary In general, high users of their health plan will want to opt for an LDHP to keep their total out-of-pocket expenses in check while low users will want to opt for an HDHP to save money on premiums. Share this article. Additional Resources. Winchester St. Lower than LDHP to account for increased financial risk.

Higher than HDHP to account for reduced financial risk. Depends on the plan, but generally higher than LDHP. Depends on the plan, but generally lower than HDHP. Yes, as long as the plan meets IRS guidelines. You are older or in poor health You expect to be a high user of your health plan You want to limit your exposure to huge medical bills.