High deductibles Following windstorm or hailstorm losses are becoming the normal state of affairs. Insurance agents as a matter of course should explore and offer their clients “deductible buy down “ coverage. But what happens and how does a policyholder pay for the otherwise huge deductibles which are becoming commonplace?
Three friends from the construction industry out of Lubbock, Texas, came up with a concept of paying the deductible over a period of time with a company called, FundMyDeductible. Drew Houghton from our Oklahoma City office was telling me about his meeting with one of the owners, Ryan Davis. Davis explained that many contractors will accept payment of the deductible over a period of time. His company merely processes the loan and transaction. It seems like a “win-win” scenario. Here is his company’s video explaining how it works:
John Houghtaling helped FundMyDeductible by making certain the authorities and insurance regulators would accept payment of a deductible over a period of time rather than right away. They showed it to politicians and the Attorney General’s office to make certain the product was in compliance with the law.
I called Steve Badger about the product and service to see what he and the insurance industry would say. My impression is that so long as there are legitimate attempts at collection and the policyholder is held accountable for paying the deductible, even Steve Badger has no problem with this product providing a way for consumers to pay for their share of the insurance restoration.
High deductibles are not good. My experience is that those accepting them are also the least likely to be able to afford them after the loss occurs. Condominium Associations should avoid them to prevent noncompliance with bylaws which normally do not allow such burdens to be placed on members. Agents should not try to compete on price by placing their customers with insurers who only write with high deductibles and should explore and offer deductible reduction coverage.
Still, if you are stuck and need a financing mechanism to fund the deductible, this common-sense product may be your answer.
Thought For The Day
Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.