Can You Save Money by Increasing Your Insurance Deductible?
Increasing your insurance deductible will save you some money on insurance premiums but, the money you save may not be substantial as believed. The insurance deductible will have a direct effect on the money you get paid when you make a claim. However, your chances of saving hundreds or thousands of dollars in terms of insurance premiums increase if you choose a deductible by using the right strategy.
Here is all the information you need in order to understand whether choosing a higher insurance deductible will be beneficial for you and the kind of money you can expect to save.
Should The Insurance Deductible Be Increased?
This entirely depends on whether you have the funds at your disposal and are willing to pay for any damages which may result from a claim. If you are financially capable of affording any claim against you, it is possible for you to increase the insurance deductible to the maximum level.
Regardless of the figure you chose, you can benefit from the savings provided by the insurance company. However, if you are only conducting research on this subject, you will need additional information to understand whether or not increasing the insurance deductible will be beneficial for you. You must also understand how to use the higher insurance deductible to save money.
Things You Need to Consider Before Increasing Your Insurance Deductible
You need to have insurance to protect you against any calamities and the problem aggravates itself when you have less money in your account. If you are having difficulties opening up with the insurance premiums, it will be tough for you even to think about increasing the insurance deductible.
The Key Considerations For Deciding Whether To Increase Insurance Deductible
The Actual Cost Of the Policy
When you increase your insurance deductible you are provided with a percentage discount from the cost of your policy. If your policy costs around $300, the percentage of discount provided to you will be minimal, especially when you compare it to the impact it can have on you financially when dealing with a claim.
A policy worth $300 will just give you a saving of $30 which may not be significant if you are required to pay $500 or $1000 for a claim. The kind of savings you can make will determine whether you should be increasing insurance deductibles or not. If the cost of the policy is high, you can save more by asking the providers for a higher insurance deductible because you get a higher percentage of the discount.
What Do You Have The Insurance for?
If you are in a stable position financially and are capable of paying minor losses by yourself, you already have a safeguard in place for the money. A higher insurance deductible would make sense if you are the kind of person that doesn’t consider making claims for below $5000 on your house or $1000 for your car because you would not be making claims anyway.
On the other hand, if you are not financially sound to pay a higher insurance deductible, you are advised to choose a policy with a deductible you can afford. The decision will ensure you are at least protected in the event of any calamities. You can always decide on increasing the deductible after you have enhanced your financial stability.
Your History Of Making Claims
If you believe you won’t ever have to make a claim, you can risk increasing the deductible on your policy. If you are already in a position of making too many claims, you are potentially paying a large sum of money for the insurance.
In such cases, you will find it beneficial to opt for higher insurance deductibles. Negotiating with your insurance provider when you are paying higher premiums is advised to understand how you can find better prices.
Higher Insurance Deductibles Can Reduce The Costs Of The Policy
If you are considering methods of saving money on insurance because you feel you are spending a significant sum of money on something which is not being used, it makes sense for you to increase the insurance deductible. The discounts provided by the insurance company will prove beneficial over the long-term.
Increasing the deductible just to save a few dollars every month without considering the long-term implications, will be an error that you shouldn’t commit. You should only make a decision after you have considered the pros and cons of playing around with insurance deductibles.
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