The deductible is the amount you agree to pay out-of-pocket for each claim on your policy. For auto insurance, this amount applies to each claim, with separate deductibles for different types of physical damage coverage. Higher deductibles typically result in lower premiums.
Some carriers offer unique coverages like disappearing deductibles, which decrease if you go without claims for a set period. For homeowners’ policies, increasing the deductible is a simple way to lower rates, provided it’s an amount you can afford. Discounts are also available for home alarm systems, bundling policies, new homes, and no claim history.
A disappearing deductible can also apply to homeowners’ policies, rewarding policyholders for consecutive years without claims by decreasing their deductible at renewal. If a claim is made, the deductible resets.
Some carriers may waive the deductible for large losses specified in the policy. For example, after a fire, if your claim exceeds the policy-specified amount, the deductible might be waived.
Agents must understand each policy’s coverage and deductible obligations, along with carrier guidelines. Deductibles can sometimes be waived or reduced depending on these guidelines.
E&O Carrier Guidelines
Paying an insured’s deductible without written consent from the E&O carrier likely violates E&O policy provisions and risks the agency’s E&O coverage. It could be seen as paying due to an error by the agent and harm their position if an E&O claim arises. Unequal treatment of clients by paying some deductibles and not others could also be perceived as biased.
This could seriously affect the agency’s financial security and professional reputation. It’s crucial to understand these potential consequences and follow E&O carrier guidelines.
For additional E&O questions, contact Ashley Riley at ashleyr@ohioinsuranceagents.com or call (614)-552-3052 or toll-free at 800-555-2742.
Legal Disclaimer
This material is for general background and insight, not legal advice. Contact legal counsel for specific analysis and advice. Ensure compliance with state law, as these laws and rules are subject to change.
Cited Resources
- Swiss Re
- Utica
