Deductibles (Home & Car) - How High Are you Willing to Go?


#1

Our home and car insurance premiums have recently creeped up and we are taking a closer look at our polices. We are thinking about raising our deductibles to get a lower annual premium which is a good way to save.

I was wondering if others are willing to share what they are comfortable with for home and car insurance premiums. How far are you willing to push it?

Also, has anyone posted specifically about these policies? If so, please add a link so we can all check it out.

THANKS!


#2

I increased home insurance deductible to $10,000 a couple years ago. I’ve got comprehensive on one of our vehicles, mainly because the windshield is expensive and we’ve got lots of deer around here. The deductible on the vehicle is $1,000.


#3

Our cars are at $1,000 and our home is at $2,500. We live in tornado alley with a roof that’s on its last leg. I’ve been selfishly hoping for a good wind or hail storm this spring…


#4

$5,000 for home and $1,500 for car. Those amounts would not be a hardship for me to pay.
You may also want to look at the amount your house is being insured for, mined was insured for $30k over the value of the home. I would not rebuild that home if something happened to it so had no desire to insure for rebuilding it.


#5

We have $2,500 on the homeowners and $1,000 on the auto policy.

We found the diminishing returns from even higher deductibles not worth the additional exposure. Increasing, for example, auto from $250 to $1,000 should yield a decent reduction in the premiums. An increase from $1,000 to $2,000 typically yields a much smaller reduction in premiums. At least that has been our experience…

John


#6

Your response made me laugh. I certainly hope noone would be hurt and the weather is crazy lately but I can see why a less terrifying storm may bring good things your way.


#7

Thanks for the details. Appreciate it.


#8

Thanks for the response. We will def. look at home value. Unfortunately - prices in our area have been very flat since we bought it 8 years ago.


#9

We went to $2000 on the cars but are still at 1% on the house.


#10

thanks! Percent of house is a good baramoter.


#11

I went to $2500 on all of ours - I think that was the max they would let us go but I should check back - would prefer it’s higher as we see insurance as a big thing type coverage, not a discount club.


#12

Wow, those all seem really high to me as a kiwi - are these pretty standard in the US?

I don’t know what mine are off the top of my head but they are all under $1000. I think our car one crept up to $750 or $1000 at one point after we made a series of claims but are now back to like $250 after years of no claims.


#13

I have 1000 on the cars, and I believe 2500 on the house. @eemusings it’s probably not typical to have such high deductibles, just in this community because people here want to save money on monthly premiums. Most people couldn’t afford to pay the high deductibles out of pocket in the event of a claim.


#14

I have $1000 on my house and $500 on the cars. I had the cars at $1000, but my wife yelled at me when she needed a windshield replaced and the total cost was $538. I guess she really wanted that $38 dollars back :stuck_out_tongue_closed_eyes:.

I found a similar thing as @60MinuteFinance, our homeowners has diminishing returns as the deductible creeps beyond $1000 - the savings are peanuts compared to the out of pocket costs (I look over a 10 year window). Obviously I think it varies significantly from insurer to insurer.


#15

Thanks for the reply. Yeah - we only started comparison shopping and already have found another insurer that is over $1,000 less than what we are being charged by Erie for home owners insurance alone. We are still researching options. But I noticed since we bought the house 8 years ago, the home owner’s is now more than double when we moved in. And the home value has not got up at all.


#16

I’ve been a little slow getting back to this thread but I’m pleased to report that we saved $1,000 a year by calling our insurance agency and talking about both our deductible and also the amount they were using to base our ‘rebuild’ costs for our current home policy. Our deductible was already at $2,500 (I wasn’t sure at the time). We did have to wait for an inspector to come out to value our home and take a bunch of pictures, but he must have agreed that the value that the insurance company was using was about $150k too high. So yippee!!

Mr.Need2Save did price compare a few other insurance options, but they were all higher than we had currently.

Also - I can confirm that raising the deductible to $5,000 (from $2,500) was only going to save us $68 a year in premiums. Just like @BrandNewPapa and @60MinuteFinance said, there seems to be ‘diminishing returns as the deductible creeps up’. To @HighIncomeParent, if our house is worth say $650k to $675k (rough estimate) than 1% would require a deductible around $6,500 and from what they told us with the $5,000 option, it wouldn’t save us enough to make it worth while. I still like that idea though!

Thanks to everyone who responded.


#17

The price of the insurance is changing drastically, and it has become really difficult to get one for the car, motorcycle and home. I agree with you that 1000 for the car and nearly 2500 for the house is really high. I have done a home insurance last year, now my friend suggested me to get helpful hints from experts, and get the motorcycle direct insurance done for the vehicles. There are many choices in the market, we can get insured with the package that best suits our requirements.


#18

planning on doing a post about this soon on my blog myearlyretirementjourney.com