Have you ever wondered if having such low deductibles is really costing you more money than what it saves? If you have read a few articles or blog on ways to save money, it is more than likely that you have seen recommendations to increase your deductibles to save you precious pennies. But is this always the best way to save money?
It could save you money…
I have read many of these articles telling me to raise my deductibles in order to save a few dollars every six months. In fact, I was almost convinced that this was a good idea. Part of what persuaded me to reconsider my deductibles. I looked at raising my deductibles. In fact, it would save me a few dollars. For example, for my specific plan, if I changed my comprehensive deductible to $250 from $100, I could save $13 every six months. This equates to $26 per year. Every little bit counts, but is it really worth it?
You never know what could happen.
Today I am glad that I chose not to increase my deductibles. It was just recently that someone broke into our car and tried to steal it. They ended up causing a fair amount of damage and I am glad that I only had to pay the $100 deductible to get if fixed (instead of $250). The reason that I chose not to change my deductible (just a couple of months before the theft) was that I figured the $26 per year that I would be saving was not worth the risk. It would take 6 years of no reported damage for me to come out ahead. Up until this time that someone broke into my car, I hadn’t ever had any car troubles. No accidents or no break-ins. I thought it was unlikely that this would happen to me. But, 6 years is a long time and it was too long to justify such a minor savings. I am glad I crunched the numbers to see that the $26 was not worth the risk. Before you go ahead and increase your deductibles on your insurance plan(s), make sure you understand the difference in the premium and judge for yourself whether it is worth the risk in an effort to save a few bucks.
Although it’s only $26 per year to go from $100 to $250 ded, what if you went from $100 to $500 or even $1000 ded? You have a good point here but many people are looking to cut back and I’m sure these people do not have $100 ded. I think you can save close to $150-$200 per year by having $1000 ded. I personally have $250 ded right now but back in my early days, I had $1000 ded.