Commercial News

Deductibles Affect Premium

Raising a deductible is an excellent way of controlling your the cost of insurance, and most policies offer choices in deductible levels. To help you select an adequate deductible, do the following:

Review loss history.
• Ask your insurance company or agent for information on prior claims. Review loss history to help you understand what your out-of-pocket expenses have been as well as to forecast what they likely will be.

Ask for options.
• Often, a policy quote is based on a commonly selected deductible ($1000 for property, $500 for auto collision, etc.). Your agent can give you quotes with a broad range of deductible options. This side-by-side analysis can highlight differences in policies and premiums when deductibles are considered.

Talk to others.
• Your CPA, bookkeeper, partners, and others with intimate financial knowledge of your business can help you weigh the risks of a higher deductible as well as discuss the incentive of a lower premium. Remember that raising deductibles is not for every business.
Some businesses will find that keeping the lower deductible is a sound financial decision. Consider all factors before making changes.

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