Tag Archive for deductible

Choosing the right condominium deductible

When I was a kid, they had one kind of potatoe chip. Plain or original no flavors. Now you have to dig for the original. There are like 25 kinds of flavored pringles ( speaking of which, we did not have factory formed chips in the olden days either)

The point here is that people like choices, and people all have different needs and preferences.

What is a deductible?

A: it is that part of the insured loss that you assume ( self insured retention) before the insurance company kicks in and starts paying on your behalf.

So what deductible is right for your association?

$500, $1000, $2500, $5000, $10,000, $25,000 or maybe a percentage?

Things to consider when making your choice:

  1. Other unit owners opinion
  2. Are low level claims, really maintenance issues
  3. What is your risk tolerance?
  4. What can we afford?
  5. Are unit owners covered under their condo homeowners?
  6. Do you have a history of claims? If you do, take a low one, If you never have a claim take a bigger deductible and save the money
  7. Can we pass off the deductible to the unit owners

There are more things that might help you make the decision, but it is mostly about what makes sense money wise, and what your tolerance level is to risk.

If you save 10% on a $20,000 premium to go from $1000 to $5000. It might make sense. If you have a claim a year you lose! If you have a claim every 2 years, you break even, If you do not have any claims, you are saving money and it makes sense to jump up to a bigger deductible.

Weigh your options, and do the best thing for you and the other unit owners.