What Is A Deductible Buyback Policy?
A deductible buy-back policy would be a insurance policy written on top of an existing policy to bring down a deductible in case of a claim, in most cases the existing policy already has a very high deductible. The deductible buyback policy will be written separate or sometimes within the existing policy and cost money but it will allow the insured in case of a claim to file a claim and utilize the smaller deductible on the deductible buy back instead of the deductible on the existing policy.
Example. An apartment complex is paying $130,000 a year for a habitational insurance policy for apartment building insurance. The person has a $50,000 deductible. (All of these numbers are hypothetical and not based on real numbers) The person wants to write a separate deductible buy back policy on the apartment. This deductible buy-back policy costs money to pick up but they only have to spend say $5,000 when wanting to redeem on a claim (or whatever they want new deductible to be) the price of the policy can tend to fluctuate based on the price of the deductible going up or down in some cases.
-A deductible buy-back insurance policy is a policy that can be written as a separate policy but sometimes it has to be written with the same carrier.
Deductible Buy-Back Policies
Sometimes also referred to as a deductible buy down insurance policy.
In the past Insurance Broker Resources has had people inquire about deductible buy back policies and we have been hesitant to write it because we assumed the person wanted to file a claim soon. Sometimes in this scenario with an apartment complex above, people will pick up a deductible buy down policy if they know they are going to file a claim say on a roof soon for the entire apartment complex so they will only pay for the insurance policy within a certain time frame and only have to pay a small deductible for a claim. This is something we are careful to pay attention to at Insurance Broker Resources and try to write the deductible buy-back policy reasonably.