Most people are aware that homeowners insurance rates are very high right now.
One way we can help alleviate these high costs is by offering a higher deductible on the homeowners policy. Specifically, we can offer a higher "AOP" deductible.
So what does AOP mean? In simple terms, it stands for "All Other Perils". This is an "insurance-y" term, but it is referring to the things covered under the insurance policy other than the perils that have a specific deductible. The most common specific deductibles are for hurricane and sinkhole. So then the "other perils" are referred to as the other things the policy covers. The AOP deductible is for these other perils.
So what should your AOP deductible be and how can it lower your insurance costs?
The most common AOP deductible amount that we see is $1,000. This is what most people choose and where we commonly start as a baseline amount. The next increment available is $2,500. Opting for this will produce a good savings on your premium because you are now paying the first $2,500 of each claim instead of only $1,000. So the premium is lower, but your risk is greater if you end up needing the insurance and filing a claim.
Some insurance companies will allow you to increase your AOP deductible $5,000, or even $10,000, in some cases. As you can imagine, these would give you even more premium savings. But again, these would be a greater risk for you if you file a claim. This would be a personal choice to make when weighing the premium savings and the potential out-of-pocket amount.
Over all, having the option to increase the AOP deductible is important choice, and something most people should evaluate as they are reviewing their homeowners' insurance.
If you have any questions on your homeowners' insurance or your AOP deductible, contact us!