0:06
percentage deductibles a growing Trend
0:09
in the insurance industry the trend of
0:11
increasing deductibles has been
0:13
occurring for several years now but the
0:15
percentage deductible is fairly new and
0:18
is becoming more prevalent as insurers
0:21
recalibrate their strategies to manage
0:24
the rising costs associated with claims
0:27
particularly those related to Natural
0:30
disasters according to John Cross a home
0:33
insurance adviser the industry is
0:35
recalibrating to manage the increasing
0:37
costs of claims but this shift places a
0:41
heavier financial burden on
0:43
homeowners Dr Emily green an economist
0:47
highlights the potential repercussions
0:49
of this shift noting raising deductibles
0:52
may lead to a drop in insurance coverage
0:55
especially for low-income families
0:57
ultimately increasing the financial
0:59
vulner ability of homeowners the impact
1:03
homeowners for many homeowners this
1:06
change means a significant increase and
1:08
out-of-pocket expenses if faced with a
1:11
claim homeowners will find themselves
1:13
responsible for a larger portion of the
1:16
repair costs which can strain budgets
1:19
especially for those already struggling
1:21
to afford insurance premiums Michael Lee
1:24
an insurance executive explains while
1:27
this change may seem challenging for
1:29
homeowners ERS it's a necessary
1:31
adjustment to ensure the sustainability
1:34
of the insurance Market in the face of
1:36
rising natural disaster costs The
1:39
increased deductibles could also
1:41
discourage homeowners from making claims
1:43
for smaller damages as the costs may not
1:46
justify the expense this shift
1:49
effectively places more financial
1:50
responsibility on individual homeowners
1:53
rather than the insurance company
1:55
differential deductibles for major
1:58
perils as part of the evolving Insurance
2:01
landscape some companies like all state
2:03
in California are testing a
2:06
differentiated deductible approach where
2:08
the percentage applies only to specific
2:11
high-risk perils such as fire damage for
2:14
instance if a homeowner has a dwelling
2:17
$300,000 and their deductible is set at
2:20
1% for General claims any incidental
2:23
damage such as a pipe burst would
2:25
trigger a deductible of
2:28
$1,000 however in the event of a fire
2:30
considered a major Peril this same
2:33
homeowner could face a significantly
2:38
$3,000 this tiered approach aims to
2:41
balance risk management for insurers
2:43
while allowing homeowners to have a
2:45
clearer understanding of their financial
2:47
responsibilities in varying scenarios by
2:50
differentiating the deductibles based on
2:53
the type of paril insurers can more
2:55
effectively manage their exposure to
2:58
significant losses from catastrophic
3:00
events while still providing coverage
3:04
occurrences homeowners must be aware of
3:06
these distinctions as they can
3:08
dramatically affect financial planning
3:11
and Recovery strategies should a claim
3:13
arise given these changes it is more
3:16
important than ever for homeowners to
3:18
thoroughly review their insurance
3:21
policies understanding the new
3:22
deductible structure and how it affects
3:25
coverage is crucial Sarah Patel a
3:29
consumer rights Advocate stresses this
3:31
trend underscores the importance for
3:33
homeowners to stay informed about their
3:36
policies and seek advice to ensure they
3:39
are adequately protected without being
3:43
ahead the future of homeowners insurance
3:46
will likely be influenced by legislative
3:48
changes and proposals aimed at reforming
3:51
the insurance industry proposed
3:54
regulations on insurance affordability
3:56
and accessibility may prompt insurance
3:59
companies to reconsider their deductible
4:01
policies to ensure compliance with new
4:04
standards conversely insurer lobbying
4:07
efforts and adjustments in State
4:08
insurance laws could impact the extent
4:11
to which homeowners deductibles are
4:13
raised potentially mitigating or
4:16
accelerating the current Trend thank you
4:19
for watching Insurance news with us what
4:21
are your thoughts on percentage
4:23
deductibles do you think they're a good
4:25
idea or a bad one be sure to hit
4:28
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