Did you know that your low deductibles on your home or auto insurance may be costing you more than you think? Many of us look at deductibles as a way to save in the event of a claim...but those low deductibles may be costing you more than you expect.
Your deductible is the amount you pay towards a claim before your insurance kicks in. If, for example, you are in a fender-bender with $1,000 worth of damage, you would pay your $250 deductible, and your insurance company would pay the remaining $750 of damage.
There are good reasons why insurance companies have deductibles and they also explain why a higher deductible can save you money in the long run. There are several expenses involved in handling a claim - from assessing the damage, to handling repairs to the costs of towing and rentals in the case of that fender-bender. By sharing some of the financial responsibility of the claim with its clients, the insurance company can reduce their costs - savings to them which translate into savings for you. Insurance companies pass the savings on to their customers who choose higher deductibles through lower premiums.
While the savings may be just a bit from year to year, having the best deductibles for your situation can save you money over time. Please give us a call to review and discuss your policies!