If you’ve ever shopped for insurance in Minnesota — home, auto, health, or otherwise — you’ve encountered the word “deductible.” It’s one of the most fundamental concepts in insurance, yet it’s also one of the most misunderstood.
Get this one concept right, and you’ll be far better equipped to choose the right coverage and avoid unpleasant surprises when you actually need to file a claim.
The Simple Definition
A deductible is the amount you pay out of pocket before your insurance company starts paying on a claim.
Think of it like this: your insurance policy is a safety net, but you’re responsible for the first portion of any loss. That portion is your deductible. After you’ve covered the deductible, your insurance kicks in and covers the rest — up to your policy limits.
A Simple Example
Let’s say you have a homeowners insurance policy with a $1,000 deductible, and a storm causes $8,000 of damage to your roof.
Your deductible: $1,000
Your insurance pays: $7,000
Your out-of-pocket cost: $1,000
Now imagine a smaller claim — say, $600 in damage. Because the damage is less than your deductible, your insurance wouldn’t pay anything. You’d cover the full $600 yourself. This is one reason it’s not always a good idea to file a claim for every minor incident.
How Deductibles Work Across Different Insurance Types
Deductibles function slightly differently depending on the type of insurance:
Auto Insurance
Auto policies typically have separate deductibles for collision coverage (when you’re in an accident) and comprehensive coverage (theft, weather, hitting a deer, etc.). These deductibles apply per claim — meaning each time you file, you pay the deductible amount.
Example: $500 collision deductible. You back into a pole and cause $2,200 in damage. You pay $500; your insurer pays $1,700.
Homeowners Insurance
Like auto, homeowners deductibles apply per claim. Most policies have a standard dollar-amount deductible, though some — particularly in high-risk areas — use percentage-based deductibles for specific perils like wind or hail.
Percentage deductibles are based on your home’s insured value. A 2% deductible on a $300,000 home means $6,000 out of pocket before insurance pays. It’s important to understand which type your policy uses.
Umbrella Insurance
Umbrella policies often have what’s called a “self-insured retention” rather than a traditional deductible, but the concept is similar — there’s a threshold you absorb before the umbrella coverage activates.
Life Insurance
Life insurance policies do not have deductibles. When a claim is paid, the full benefit goes to the beneficiary.
Commercial / Business Insurance
Business policies follow a similar structure to homeowners and auto — deductibles apply per claim, and the amount can vary significantly depending on the type of coverage and the risk involved.
The Deductible-Premium Relationship
Here’s one of the most important things to understand about deductibles: they have a direct inverse relationship with your premium.
Higher deductible = lower monthly/annual premium
Lower deductible = higher monthly/annual premium
Why? Because when you accept a higher deductible, you’re agreeing to absorb more of the financial risk yourself. The insurance company is taking on less risk, so they charge you less.
This creates a real choice every policyholder has to make:
Lower Deductible: You pay more each month, but face less out-of-pocket cost if something happens. Better if you don’t have much in savings.
Higher Deductible: You pay less each month, but need to be able to cover a larger amount if something happens. Better if you have an emergency fund.
How to Choose the Right Deductible
There’s no one-size-fits-all answer, but here are the key questions to ask yourself:
1. What Can You Afford to Pay Out of Pocket?
Your deductible should be an amount you could realistically cover without financial hardship. If you choose a $2,500 deductible to save on your premium, but you don’t have $2,500 available in an emergency, that’s a problem.
2. How Often Do You Expect to File Claims?
If you’re a careful driver with a clean record and a newer car in a safe area, a higher deductible might make sense — you’re less likely to need it. If you live in an area prone to severe weather or have a long daily commute with high accident risk, a lower deductible might be worth the higher premium.
3. Does the Math Work?
Compare the premium savings of a higher deductible against how much more you’d pay out of pocket in a claim. For example, if raising your deductible from $500 to $1,000 saves you $200/year on your premium, you’d need 2.5 claim-free years just to break even. That analysis helps you decide.
Common Deductible Mistakes to Avoid
Choosing a deductible you can’t actually afford: The savings feel great until you need to file a claim and can’t cover your portion.
Forgetting that deductibles apply per claim: If you have two separate incidents in one year, you pay the deductible twice.
Confusing percentage and dollar deductibles: Always confirm which type applies to your policy, especially for homeowners coverage.
Filing small claims just because you’re covered: Filing a $700 claim with a $500 deductible might not be worth it — you only get $200, and your premium could increase at renewal.
Should You File a Claim or Pay Out of Pocket?
This is a question worth asking every time something happens. A general rule of thumb: if the cost of the damage is only slightly above your deductible, it may be better to pay out of pocket. Filing a claim — especially multiple claims in a short period — can lead to premium increases or even policy non-renewal.
A good agent can help you think through whether filing makes sense in a given situation.
The Bottom Line
Your deductible is the foundation of how your insurance policy actually works in practice. Getting it right — choosing an amount you can afford that balances your premium cost — is one of the most important decisions you make when purchasing a policy.
When in doubt, talk it through with your insurance agent. That’s exactly what we’re here for.
Have questions about your deductibles? Whether you’re reviewing an existing policy or shopping for new coverage, our independent agents can walk you through your options and help you find the right balance of coverage and cost. Contact us today for a free review.
It’s one of the most common insurance questions we hear at Sentinel Assurance Group: “If I use my personal car for work, am I still covered by my insurance?”
The short answer:maybe—but don’t count on it without checking first. Let’s walk through it in plain English—no insurance dictionary required.
🚘 What Your Personal Auto Policy Does Cover
Your personal auto policy (PAP) is designed for everyday use:
Commuting to and from work
Running errands
Road trips
School drop-offs and pick-ups
The occasional Target run that turns into a full cart (you know the one 😄)
But once you cross into the realm of business use, your personal policy may tap out.
⚠️ When “Work Use” Becomes a Problem
Here are a few common scenarios where a personal auto policy might not be enough:
You’re a real estate agent showing homes to clients
You drive your own vehicle for work errands—like banking or supply runs
You’re a home health nurse visiting patients
You drive for DoorDash, Uber, Lyft, Amazon Flex, etc.
You use your car to deliver goods, tools, or materials for your business
In these situations, insurers often require additional coverage because the risks are higher—and different—than regular personal use.
👔 What If It’s Just “Occasional”?
Even if it’s just the occasional trip for your boss, you’re still putting yourself at risk of a coverage gap. Why? Because standard personal auto policies often exclude business use unless it’s been specifically disclosed and endorsed.
Likewise, if you own a small business and use your personal vehicle regularly to operate it, you’ll likely need a commercial auto policy.
Employers, listen up too—if an employee gets into an accident while running an errand for your business, your company could be on the hook, especially if there’s no “hired and non-owned auto liability” coverage in place.
🔧 The Coverage Fixes (They’re Easier Than You Think)
Good news: these gaps are fixable! Here’s how:
Be upfront with your insurance agent about how you use your vehicle. (Yes, even the side hustles.)
Ask about a business use endorsement—often very affordable.
If you drive for a delivery or rideshare platform, inquire about rideshare endorsements or commercial policies.
Business owners: make sure you have hired/non-owned auto coverage if employees ever use personal vehicles for work.
✅ Bottom Line
Using your personal car for work can create a coverage gap. And the last thing you want is to find that out after a fender-bender.
The good news? With the right advice, you can stay protected without overpaying. We’re here to help make sense of it all—no jargon, no judgment, just smart guidance tailored to you.
Got questions about how you’re using your vehicle? Let’s talk—before that “quick work errand” becomes a big insurance headache.
Rosemount, MN, October 2024 — Sentinel Assurance Group has been named a 2024 Nextdoor Neighborhood Fave business, the annual awards program that recognizes local businesses loved by neighbors. Neighborhood Fave winners like Sentinel Assurance Group will receive greater visibility and ranking on the Nextdoor app, a Neighborhood Fave badge on their Nextdoor Business Page, and a “2024 Neighborhood Faves Winner” sticker to showcase their win in the real world.
“This year’s Neighborhood Fave businesses represent the outstanding service providers, local spots and eateries that are an essential part of our everyday lives,” said Nirav Tolia, Chief Executive Officer of Nextdoor. “We’re thrilled to celebrate these important members of the community, but more importantly, being a Neighborhood Fave is good for business. Congratulations to all of this year’s winners.”
Selected by volume of neighbor ‘Faves’ and recommendations on the platform from the past year, the Neighborhood Faves awards recognizes the most beloved local businesses on Nextdoor. Used by one in three households in the US, Nextdoor is the essential neighborhood network where neighbors, public agencies, and businesses connect around local information that matters. In a May 2023 Nextdoor survey, 94% of Nextdoor neighbors report valuing recommendations for products, services, and businesses from their Nextdoor neighbors and Neighborhood Faves winners receive six times more recommendations on their respective Business Pages.
The complete list of winning businesses is available at nextdoor.com/favorites. Join the neighborhood network by downloading the Nextdoor app in your favorite app store or visiting nextdoor.com.
Insurance can be complicated. How do you know you’re making the right decision when it comes to protecting the most important things in your life? Find out how an Independent Insurance Agent is a simple solution to this!
We give you more choices and options
The beauty of working with an independent insurance agent is that we represent many different insurance carriers that offer a wide variety of coverages at varying price points. We do the work of shopping your quotes around with those different companies to determine which one is the best fit for the types of coverage you need with the best rates for that coverage. We shop, you save!
We are industry experts
Insurance is complicated, let’s be real! We are licensed and trained in industry verbiage and terminology and are equipped to be able to explain to you, in simple terms, which help you to make informed decisions. Why go to google and confuser yourself on the different kinds of insurance that are available, when we are just a phone call away?
We are your advocate
Since we work for YOU and not the insurance company, we are your advocate! We will assist with claims, billing or changes your coverage directly with the insurance company.
We are your neighbor
We are a small, local business that shares your passion for our community and famillies. We are woman-owned and have a pusle on the local community and its benefits and challenges. You won’t sit on hold in a quete, but can walk right into our quaint office in Rosemount.
We are a one-stop-shop
With the ability to write with so many different insurance companies, we are able to meet all of your insurance needs. Everything from Home, Auto, Life & Business coverages, we work with tons of companies that offer a variety of coverages.
We are your personal advisor
Insurance isn’t just about finding the cheapest prices. It’s about making sure that you aren’t suprised by unexpected expenses if a loss were to happen. Through working one-on-one with you, we listen to meet your specific, unique insurance needs.
We are your lifelong advisor
We love building life long relationships with our customers and often times, they become good friends. We know that life is ever-evolving and we work with you throughout those stsages. Everything from buying a home, getting married, growing your family, teen drivers and getting ready for that retirement home.
You’ve just been involved in an auto accident. The most important thing is your safety. If you are injured , please call for emergency help right away. Here are some additional steps to help you file a claim on your auto insurance:
Call for emergency assistance if needed.
Once all parties are safe it’s helpful to take pictures of the damage and exchange insurance and driver information.
Next call your agent whether you are at fault or not
Follow the directions your agent gives you to provide all documentation related to the accident and file your claim. You may need a police report.
Keep copies of all your documentation and bills related to the accident. Jot down detailed notes following conversations about the accident. You need to know who you spoke with and what they said, at what date and time, and how to contact the person.
Find out from your agent:
Time limitations for filing your claims and submitting bills.
Time limitations for resolving claim disputes.
When you can expect the insurance company to contact you.
Whether you need estimates for the damages.
Whether your policy covers a rental car while your car is being repaired and how much it covers.
Next we will cover the steps to take to file a claim on your homeowner’s insurance:
Report any crime to the police if its due to a burglary or a theft
Phone your insurance professional immediately
Have the insurance adjuster inspect the damage
Make any temporary repairs to prevent further damage to your home or items in it
Prepare a list of lost or damaged articles
If you need to relocate, save your receipts, some of those costs may be reimbursed
We hope this has helped you navigate the claims’ process and answered any of the questions you may have had. If we can be of further help, feel free to give us a call here at Sentinel Assurance at 651-237-5180.
Do you have teen drivers in your home? Maybe you are doing some distracted driving yourself. An unexpected car accident can leave you feeling a bit scattered. That’s why it’s important to brush up on post-accident procedures. Here are 7 steps guide can help make the moments after an accident less stressful — and the claims process a whole lot smoother.
1.Move to a safe area if you can
If it’s safe to do so and you aren’t seriously injured, move your car out of further harm’s way, like to the shoulder of the road. If moving your car just isn’t possible, flip on your hazards to warn other drivers that your vehicle isn’t going anywhere any time soon.
2.Stop your vehicle and get out
Make sure your car is no longer moving, turn off the engine, shift into park, or set the hand brake if you drive a manual. Take a moment to catch your breath. Check to make sure it’s safe to get out of your car before opening the door.
3.Check on others involved
Check on all the other parties involved, including drivers, passengers, and pedestrians, to make sure no one is hurt. Call 911 if anyone may be injured. Even a seemingly minor symptom like dizziness should be checked out by a health care professional.
4.Call the police to the scene
Even in minor accidents, a police accident report can prove invaluable when dealing with your car insurance company and other drivers. Cooperate fully, but avoid admitting fault or blaming others while at the scene. Let the police objectively judge events and determine who, if anyone, is at fault in the crash. If the police can’t make it to the scene (which is more likely if there are no injuries), you can file an accident report through your state’s DMV.
5.Gather info
Try to write down as much info as possible in the accident aftermath, including:
Driver and passenger names
License plate numbers
Insurance info
Makes and models of all vehicles involved
Contact info for any eyewitnesses
Location of the accident
The name and badge number of any responding police officers
6.Document the scene
If you have a smartphone with a camera, snap some photos of the accident scene. They’ll come in handy during the claim process.
7.File your insurance claim
After step 7, it’s our turn to help. We’ll work with you to get your car repaired as quickly as possible. Call us at 952-479-5781
We sincerely hope this post gives you some tips if you are ever in the situation above. Safe driving!
