Deductible, premium, and limit: 3 Atlanta home insurance words to know

It's important to know about your premium, deductible, and home insurance limit.When you’re dealing with your Atlanta home insurance, there are a lot of vocab words – and numbers – that are important for you to know. You know that you need to get home insurance, but what do all those numbers and words mean? What are some of the things that you need to pay attention to? We’re going to explain three home insurance terms you should know: premium, limit, and deductible.

What is a home insurance premium?

Okay, let’s be real – this is probably the number you’re most concerned about.

And for good reason:

To put it simply, your home insurance premium is basically your home insurance rate. It’s what you pay for home insurance. So, yes, it makes perfect sense that this would be a number you’d want to pay attention to.

Now, you might be wondering how the insurance company decides how much your bill is going to be. Believe it or not, it’s not some sort of trick or mumbo jumbo like a magician pulling a rabbit out of a hat. It’s not a random number that comes from midair.

The truth is home insurance companies look at a lot of different factors about you and your house when they’re setting your premium. They don’t exactly do “random” or “detail-free” when it comes to insurance rates. For example, they may look at the following factors when setting your home insurance rates:

  • Your location
  • The crime rate where you live
  • The building material your home is made of
  • Your credit score
  • How close you are to a fire station
  • Your roof
  • Whether or not you’ve bundled
  • How much it would cost to rebuild
  • How old your house is
  • Any discounts you qualify for

So, that’s home insurance premium in a nutshell. The best way to find out how much your home insurance will cost is to get insurance quotes – and you can do that by filling out our online form or giving us a call today.

What is a home insurance deductible?

Another word to know (and number to be aware of) is deductible.

Your home insurance deductible is the amount you agree to pay towards a claim if you have a loss to your home. You have your portion of the “bill” per se and your home insurance will help you cover the rest of your claim. (You might feel better about the whole thing if you consider that they’ll probably be paying a lot more than you will!)

It’s easiest to explain the concept of how a deductible works by giving an example.

Let’s say you have a $1,000 deductible on your home. A tree very rudely decides to fall and hits your roof. Thankfully no one is hurt, but the tree did cause $5,500 worth of damage. You would pay your $1,000 and your insurance company would pay the remaining $4,500.

Your deductible can also play a part in your Atlanta home insurance rates. It can affect your premium (see, using those vocabulary words already!) because if you choose a higher deductible, you’re less likely to file a claim. And that means you could see lower premiums. However, you don’t want to set your deductible so high that it would be a huge financial burden to pay if you had a claim. You need to consider how much you could comfortably afford to pay if you had a loss.

What is a home insurance limit?

Your home insurance limit is simply how much your insurance would pay out for a claim. (It’s essentially how much home insurance you’ve purchased.) Your home insurance would tap out if your claim hit that amount.

When you’re setting your home insurance limit, it’s important to make sure you have enough home insurance to:

  • Completely rebuild your home from the ground up (meaning you should insure your home for its replacement cost)
  • Cover your liability
  • Replace your personal belongings

Again, it’s important that you have enough insurance. Protecting yourself financially means making sure you have a safety net that will actually catch you – not let you crash to the ground. So, make sure that your limits of Atlanta home insurance are high enough.

Protecting your home with the right Atlanta home insurance is easy when you work with our team. Get started with quotes by filling out our form or giving us a call today.