What does deductible mean?
When taking out household contents insurance , you will encounter the term "deductible. What exactly does the deductible mean?
What is deductible?
With insurance, you may have a deductible. A deductible means that a portion of the damage is your responsibility by default. The amount of the deductible can vary by insurance, and in many cases you can determine the amount yourself. A deductible usually applies per claim event.
Example: you have a claim of €5,500. The insurance policy states that you have a risk of € 250 per event. You will therefore be reimbursed a maximum of € 5,250.
Example: you live in Amsterdam and have € 2,000 damage due to theft. The insurance policy states that you have an excess of € 250,- per event. Because you live in the 1 of the big cities, an additional deductible of € 100 applies. You will be reimbursed a maximum of € 1,650 in this case.
Do you have a deductible with contents insurance?
As you read earlier, most insurers allow you to set your own deductible. The higher the deductible you choose, the lower the insurance premium. With a higher deductible, the insurer has to pay you less per claim.
Some insurers always require a deductible. This is often a low amount. The reason for this is that it creates a barrier to claiming every small damage on the contents insurance. This is because every claim creates administrative work for the insurer, even small claims. This costs an insurer a lot of time and ultimately money.
In addition, by setting a mandatory deductible, insurers hope that this will make you take extra care of your belongings.
As you saw in the example, there are insurers who set a different deductible for certain claims. In practice, this occurs in cases such as theft/burglary(especially in big cities) and storms.
So when applying for contents insurance, it is important that you pay attention to the amount of the deductible with this particular insurer. You can always find the amount of the deductible on your policy schedule and in the policy conditions.
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Are there household insurance policies with no deductible?
There are insurers who offer you the option of purchasing contents insurance without a deductible. Please note that the amount of the deductible always affects the premium. The lower the deductible, the higher the premium.
Is it wise to choose a high deductible with household contents insurance?
Whether it is wise to opt for a (high) deductible with household contents insurance has to do with your personal and financial situation. A high deductible is not by default wise or unwise. It is important to consider whether you can easily cover the deductible, even when there are multiple claims per year. Is this feasible and does it outweigh the premium discount you get with this higher deductible?
These factors can determine the cost of contents insurance.
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