Do you know that you can save hundreds of dollars on your yearly home insurance bill by simply increasing your home insurance deductible? By this, we don’t mean changing from $500 to $1,000. We want you to think bigger: $2,500. Opting for a low deductible is a characteristic mistake. Read further to understand why.
1. Lowered Monthly Premiums
For home insurance, a higher home insurance deductible means that you will be paying low premiums. A lower deductible, on the other hand, equals high monthly premiums. Therefore, the most effective way to lower your premiums is to increase your deductible.
2. Increased Premium Savings
A great way to save money on your insurance is to review your deductibles. There is an inverse relationship between your cost of deductibles and your cost of monthly premiums. One way to look at this is to make a comparison of your potential savings over several years against the additional out-of-pocket risk you incur. While this is by no means a definite way to make a decision, it is an important piece of information to help you measure your risk trade-off.
3. Higher Deductibles Mean Fewer Claims
You could raise your deductible to avoid making many claims. Your premiums increase each time you make a claim. You most likely do not want to make claims for small losses. Therefore, it is in your best interest to get a higher deductible, so you are only worried about paying up for major disasters or larger claims.
Your home insurance deductible should be the amount of money you are comfortable paying in case your home is damaged. We recommend having a minimum of $1000, but you might increase this to access long-term savings.
Vargas & Vargas Insurance is one of the premier local independent insurance agencies — we work for our clients and not the insurance company. We will customize your insurance coverage to your specific needs at the right price, and we are also here to answer all of your insurance questions. Contact us today.
