Deductibles vs. Premiums: Finding the Right Balance for Your Budget

Hello everyone, it’s Candice Freese – an agent here at Citizens Alliance Agency (CAA). In today’s blog, I will cover deductibles and premiums.

A deductible is the amount you agree to pay out of pocket before your insurance kicks in. The premium amount is the regular payment you make to maintain your insurance policy.

When you choose a higher deductible, you agree to cover more of the initial costs yourself if you need to make a claim. Because the insurance company is taking on less risk for smaller claims, they reward you with a lower premium.

With a lower premium, you’re paying less each month (or year) for your insurance coverage. This can make it easier to manage your budget if you’re prepared to pay more out-of-pocket if you need to make a claim.

Higher deductibles can significantly reduce your premium costs, which is great for those who don’t expect to make many claims.

It allows you to manage your monthly expenses while ensuring you have coverage for larger, unexpected events.

In summary, opting for a higher deductible means you pay less in premiums, making insurance more affordable on a regular basis. However, it also means you need to be prepared to cover a higher amount out-of-pocket in the event of a claim.

If you need help with any specific examples or further details, let us know!