(Newswire.net — May 28, 2021) — There are many types of home insurance policies on the market right now, each with its unique features, each more or less adaptable to a homeowner’s needs. Most policy owners, depending on their demands, don’t want a standard plan — one that’s a template and used for everyone. They need features and customizable benefits that normally don’t come in out-of-the-box plans. Your home is unique, you are unique, and, ultimately, your policy also has to reflect this key characteristic — it has to be unique. It’s more than reasonable to shop around and find that one exclusive solution to your desires, needs, and singular way of life.
What is a home insurance custom payment plan?
As a whole, home insurance provides aid in the event of damage to your property or personal belongings. It can also help out and you can file for relief in the event you are held responsible for an accident or injury — e.i, someone takes a nasty spill in your driveway and wants to sue.
Policies typically include six distinct types of coverages and each with its own insured percentage/amount.
- Dwelling: enough to cover to rebuild your home.
- Other Structures: 10% of add-on dwellings like fences, sheds, or other stand-alone structures.
- Personal property: 505-70% of belongings damaged or stolen.
- Additional living expenses: 20% of bills you’ll need to cover in the event your home is being repaired.
- Liability $100K – $500K of injury or property damage to a third done through neglect or unintentionally.
- Medical Payments: $1K -$5K payments to someone injured in your property.
How exactly does your plan work and how do you pay for it?
Your plan works, mostly on what is called the 80% rule. What is the 80% rule?
It’s simple, your insurer will only fully cover the cost of damage per the percentages written up above, as long as you have purchased insurance coverage that equals 80% of your property’s value.
Most people, in order to lower their premiums, might buy a policy that’s not fit for their house — value-wise.
Once you’ve decided on a policy, aside from monthly payments, you’ll also have to pay deductibles – if you ever want to file a claim.
Deductibles
When you purchase insurance and shop around, you’ll quickly notice that the cost of those monthly premiums is intrinsically tied not only to your credit score but to your deductible. The lower the deductible, the higher the monthly premiums.
Most people on a tight budget fall into a Catch-22 scenario.
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They need, for various reasons – one being that loans and mortgages demand you have it – homeowner’s insurance.
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They can’t pay the monthly premiums — at least not the high rates with the low deductible.
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They purchase the low rates with the STAGGERING deductibles.
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When they have to file a claim, for a repair, renovation, or unexpected damage, they are walloped by the fact that they can’t pay the deductible.
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They have been paying premiums for years, and now can’t use their product because they can’t pay the deductible.
People on a budget, at least 78% of homeowner policyholders constantly find themselves in this dilemma.
How do I pay a deductible I can’t afford?
There are 4 ways to approach the deductible quagmire — you need a repair, you file a claim but before the insurance company gives you the amount, you’ll have to pay your contractor a portion – out of pocket – of repairs.
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Get a disreputable contractor: someone sketchy that will add onto their estimate the cost of the deductible and/or give you lesser quality materials that way the budget is lowered and they can cover the WHOLE cost of repairs.
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Get a loan: go to a bank and or service and try to get a personal loan to pay the deductible.
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Payout of pocket: pay the whole amount without credit. Sometimes this amount is small, other times – depending on the clauses and contracts you have with your insurance company – the amount might be out-of-this-world.
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Payment plan: create a structured payment plan with your contractor. They’ll bankroll your deductible as long as you’ve created a legacy biding plan with them to reimburse their loan. Or use the FMD app to get a custom payment plan.
The benefits of Setting up a custom payment plan with your contractor
It fits the homeowner’s needs.
Homeowners will have to bargain with the contractor to come up with a plan that is beneficial to them — a plan that adheres to their financial needs and fiscal responsibilities.
Both customer and contractor stay legal
There’s nothing sketchy about it. You and your contractor stay legal and above board. You both work within the confines of the law and can, in the future, depend on its safeguards — this was not an option with a disreputable contractor.
Payments are made in full and on time
Payments are made on time and both you and your contractor can make plans based on the cash — they can build on that revenue stream, while you can account for loss and how it will affect your wealth management over time.
Payments are made over a period of time
This is convenient to homeowners since they won’t have to acquire debt to pay the deductible — nor will they have to use their savings for it.
What are the solutions to get a home insurance custom payment plan?
There are apps and payment platforms right now like Fund My Deductible that help in creating payment plans between contractors and homeowners. They have legally binding structures and plans and are easy to use from both ends.