From auto to health, every insurance policy is unique. Premiums, deductibles, and limits, however, are common to all policy types and have a significant impact on both your short- and long-term satisfaction with coverage. To ensure you fully understand a policy and what it offers, here's what you should know about these three policy elements

What’s a Premium?

The premium is the price of the policy, which usually has a duration of six or 12 months. Insurance underwriters determine an insurance provider’s premiums.  The underwriting process involves evaluating a policyholder's risk of filing a claim based on a variety of factors, including coverage type, age, and deductible amount. Although you can pay the full premium at once, most providers also allow monthly payment installments for a slight fee. 

What’s a Deductible?

When you file a claim, you must first pay a preset sum of money towards the expense—aside from the premium—before coverage kicks in. Deductible ranges vary based on the type of policy. For instance, deductibles for car insurance usually range from $250 to $1,000. The standard deduction to cover a claim filed by a homeowner is often $1,000.

What’s a Limit? 

Every policy has a built-in limit—the maximum an insurer pays to satisfy a claim. Many policies have different limits for each aspect of coverage. For example, home insurance policies outline liability, personal property, and dwelling coverages up to a set amount. After you pay the policy deductible, your insurance policy pays for approved claims until the preset limit is reached. Any remaining costs over a policy limit become your responsibility.

If you're on the hunt for affordable coverage, contact Tim Bryan Insurance in Andalusia, AL. This local State Farm agency provides a range of coverage options for residents and businesses across Covington County. From home and auto to life and health, their trusted team is committed to personalized and reliable service. Request a quote today by calling (334) 222-1460.