September 24, 2014 Admin | September 24, 2014 What does raising the deductible on insurance policies do? Why would you consider doing that for all policies?
4 thoughts on “September 24, 2014”
Raising the deductible raises the amount you have to pay out of pocket when you have a claim, but this causes your monthly payments for the insurance to be less the higher the deductible. Lets say an $200 deductible causes an $100 a month payment, or an $500 deductible causes an $50 a month payment, these numbers are not representative of actually rates. You want to lose as much money as possible from the insurance company, insurance is only for emergencies that cant be covered by an emergency fund.
If you raise the deductible that USUALLY means your premium decreases, which should mean more money in your pocket. Since we never use insurance that much (lest they drop us), it makes no sense to have a low deductible
Your right i said that backwards in the first sentence.
Great to see you joining the conversation, Tamara. Let’s recap.
As the deductible goes up, the premiums go down. It is wise to see insurance as a protection against catastrophe, not the small mishaps in life. Raise those deductibles, stash the money in the emergency fund for future use, and use that extra money saved from lower premiums to pay off debt, increase savings, and invest for your future.
Low deductibles may cause you to file more claims, which will increase your premiums and as Tamara stated, you may just get your butt dropped. Insurance companies don’t like paying claims and they won’t pay out very many before you get a cancellation notice. Focus on the big stuff, deal with the small stuff from your savings. It’s that simple.