When Is A Good Time To Increase Deductibles On My Auto Insurance?

We are all looking for ways to save money.  Our agency works hard to offer the best combination of pricing and coverage to all our clients. We recommend that you review your insurance program annually to make sure your insurance is meeting your changing needs.  Considering changes in deductibles should be part of this process. Increasing deductibles can reduce your premiums and may save you money in the long run.   

Pro:
Increasing your deductible will reduce your premiums. For example, let’s say you pay $225 per month for your auto insurance with a $50 comprehensive and $100 collision deductible. By increasing your deductible to $250 comprehensive and $1,000 collision you might save $75 per month. That is a $900 annual savings. Assuming you don’t have regular accidents, the savings would almost pay for itself in a year. (This is an example only. Actual savings will be based on individual factors)

Con:
If you raise your collision deductible to $1,000 and have an accident the next day, you must pay the $1,000. Are you prepared to manage that? Keep in mind these deductibles will apply even if your car is stolen or a tree falls on it; it does not have to be your fault.
Your deductible and limits are a personal decision and your financial situation plays a part in the deductibles and coverage you choose. We can review your insurance and provide deductible saving options, so please call us today.

Final Thought – When should you remove your deductible?
There does come a time when it is not cost effective to maintain any comp/collision insurance. As vehicles age, the depreciated value continues to get lower. At some point you must consider the cost of insurance vs. what you might get in return. For example, if you pay $200 for a six month policy, but your car has a depreciated value of $1,500, the cost benefit may not be worth the insurance. In this example your annual insurance cost is around 37% of your vehicles value.