October 11, 2014
What will raising or lowering your insurance deductibles do to your yearly premiums? What is the wise option?
What will raising or lowering your insurance deductibles do to your yearly premiums? What is the wise option?
If you raise your deductibles your premiums will drop and the out of pocket cost you have to pay will increase when you have a claim. This is normally a good idea because you are more likely to pay more in premiums then pay in a copay if you have a low deducible. If you have a 1000 deductible and a 100 premium. After 10 years you would have payed for the cost of the deducible. Instead of having an $100 deductible and paying 250 a year and only taking 4 years to use up that $1000. This is assuming no claim in that time. So if you play the odds more in your favor and have a high deducible and low premiums you will normally be better off.
Well said, Garrett. Let’s review.
When you raise your deductibles, your yearly premiums go down. If you lower them, the yearly premiums will go up. It is wise to raise them as high as possible to reduce your premiums and reduce how many claims you file. Insurance companies don’t like people who file a lot of claims. They will drop you.
Be sure to increase your savings to handle any deductible when filing for an insurance claim. The savings is also there to handle the small stuff in life. Try to remember, insurance is for catastrophes, not small stuff.