When it comes to saving on insurance, increasing your deductibles is one of the most common strategies. However, you should weigh the pros and cons carefully before making this decision. Here’s what you need to know.
Is It a Good Idea to Increase My Deductible to Save Money?
Your deductible is the amount of money you pay out of pocket before your insurance steps in. For example, choosing a $1,000 deductible on your homeowners insurance policy means that your insurance will pay for the damages that are covered by your policy minus $1,000. The insurance company won’t be responsible for any damage that doesn’t exceed your deductible.
With this background in mind, it’s easy to see why increasing your deductible lowers your rates. From the point of view of the insurance company, the money you save every month is offset by the higher out-of-pocket expenses you have to make when you have a high deductible.
This money-saving strategy makes sense only if you are able to pay the increased deductible without wreaking havoc on your finances. If you can’t afford a higher deductible, it’s better to stick with a lower one — it will save you a lot of headaches.
Other Ideas to Save on Insurance
In short, raising your deductible is a smart strategy but only in some cases.
If increasing your deductible doesn’t make sense in your situation, remember that there are other strategies to save on insurance.
The specifics vary depending on the type of insurance. For example, when it comes to auto insurance, some ways to save on your premiums include installing anti-theft devices or taking a qualifying safe driving course.
When it comes to homeowners insurance, sometimes you can lower your rates by making your home more disaster-resistant or installing home security devices such as burglar and fire alarms.
If you are interested in more ways to save on insurance, contact the experts at Delgado’s insurance today. We’ll be happy to help you find a solution that works for you.
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