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Insurance deductibles....

Old 12-04-2019, 09:53 AM
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Default Insurance deductibles....

Going over my insurance costs (auto and homeowners) which I try to do at the end of each year. Got some new quotes and they always ask what deductible you want. My school of thought is that insurance is to protect against catastrophic loss, not nickel and dime repairs. I typically choose a higher deductible in exchange for a lower premium. Curious how other people approach this. Do you go for the lowest, highest or somewhere in the middle?
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Old 12-04-2019, 09:56 AM
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Originally Posted by 1blueheron View Post
Going over my insurance costs (auto and homeowners) which I try to do at the end of each year. Got some new quotes and they always ask what deductible you want. My school of thought is that insurance is to protect against catastrophic loss, not nickel and dime repairs. I typically choose a higher deductible in exchange for a lower premium. Curious how other people approach this. Do you go for the lowest, highest or somewhere in the middle?
i agree but it comes down to ones means and likelihood of occurrence. i.e. i know plenty of people that have huge deductibles on homes, boats, etc, but they have no problem being out-of-pocket $10-50k.

my other half had $1k deductible on her car, it was hit and run, $2k in damage, i said no point in using insurance to have a claim over $1k more out-of-pocket. now if she had a $100 deductible, i think it would have been worth considering using insurance over $2k. we both have had no accidents so are not bad drivers but i have been hit while parked/docked but in those cases you hope to be made whole from the other person's insurance...

then we get threads here all the time with people suggesting use your insurance, over $100-1000 damage, which is just plain stupid 99% of the time

Last edited by mystery; 12-04-2019 at 10:18 AM.
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Old 12-04-2019, 10:03 AM
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Premium difference between deductibles vs chance of frequency.

Undertaking same thing right now

$700.00 policy difference between 2% hurricane($5480.00)/$2500.00 deductible
or a 5% Hurricane($13700)/$5000.00 deductible

In this case I will take the higher policy with the lower deductible at 2%/2500.00 for an extra 700 betting I will see a hurricane in next 11 years. The $8220.00 difference in Hurricane peril will pay the extra $700.00 for 11 years.

My way of thinking but to each their own.
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Old 12-04-2019, 10:14 AM
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Mostly go high deductible for the savings and the fact that I don't like betting that something expensive and bad IS going to happen.
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Old 12-04-2019, 10:18 AM
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Originally Posted by 1blueheron View Post
Going over my insurance costs (auto and homeowners) which I try to do at the end of each year. Got some new quotes and they always ask what deductible you want. My school of thought is that insurance is to protect against catastrophic loss, not nickel and dime repairs. I typically choose a higher deductible in exchange for a lower premium. Curious how other people approach this. Do you go for the lowest, highest or somewhere in the middle?
As much as I hate to admit it, you're right on this.

In a minor car accident last year and talked to the agency about impact to my rates if I used it. Actually ended up on the line with someone who knew what they were talking about AND were willing to honestly discuss the details. Basically, I could have used it, no problem. But my rates would go up for a period of time and, magically, the increased amount that I would pay would be about the same (if not more) than they paid out. There's some more nuance to it than that, but it's close enough.

All that being said, I haven't really run the numbers on it, so my deductibles are around $2,500 now. I think if you go much higher than that, you aren't saving enough in premiums to offset a $10,000 deductible. If that makes sense.
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Old 12-04-2019, 10:23 AM
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Auto - $2,500 deductible collision
Homeowners - $10,000 except wind is 3% of value
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Old 12-04-2019, 10:24 AM
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Originally Posted by Redbeans View Post
Premium difference between deductibles vs chance of frequency.

Undertaking same thing right now

$700.00 policy difference between 2% hurricane($5480.00)/$2500.00 deductible
or a 5% Hurricane($13700)/$5000.00 deductible

In this case I will take the higher policy with the lower deductible at 2%/2500.00 for an extra 700 betting I will see a hurricane in next 11 years. The $8220.00 difference in Hurricane peril will pay the extra $700.00 for 11 years.

My way of thinking but to each their own.
this always just do the math and then evaluate your risk
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Old 12-04-2019, 10:29 AM
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I get quotes on different deductibles and pick the highest deductible that makes sense. Sometimes above a certain amount the cost does not drop as fast as the deductible increases.
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Old 12-04-2019, 10:30 AM
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For auto, we keep a low deductible for comprehensive because the chance of one of us (4 autos) hitting a deer during a year is really good.
We have averaged 1 a year for the last 4 years between me, my wife and 1 of my daughters.
Everything else is a high deductible.
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Old 12-04-2019, 10:37 AM
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Find your comfort zone...and if you have a history of using your insurance, reference the history and see how you make out.
Things to weigh:
*Savings as you increase the deductible
*Versus...how much you've spent out of pocket that lower deductible plans might have covered

I don't know your health, I don't know your driving record, I don't know if you're accident prone or your house is in poor condition or in a flood zone and at higher risk. So..it's hard to answer.

Myself...I tend to lean towards a higher deductible...but my wife and I keep an "envelope system" for our budget at home, and try to have padding already there to cover what's needed that insurance won't. The savings is worth it for us.
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Old 12-04-2019, 10:37 AM
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Originally Posted by Bernie1951 View Post
Auto - $2,500 deductible collision
Homeowners - $10,000 except wind is 3% of value
doublewide?
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Old 12-04-2019, 10:48 AM
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Low, but not the lowest auto and home deductibles. Guess the state for $100.
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Old 12-04-2019, 11:11 AM
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Low deductible for vehicles.

higher deductible for real estate.
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Old 12-05-2019, 07:05 AM
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All of our vehicles have low book value because of high mileage. I can;t see paying a low deductible just to have them total the vehicle for a deer strike and give me a low ball book based on mileage. My wife killed 2 deer in the past 3 years so that is our biggest risk. If I were driving 40k+ vehicles I might go a different route.

Chances of my house burning, flooding or blowing away is pretty low as it is a concrete house on a hill. My biggest concern is lightning strikes and roof damage or liability for injury on the property.
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Old 12-05-2019, 07:47 AM
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The cost of a low deductible on our Vehicles was negligible so we opted for the $100 deductible. Health insurance we have a high deductible with a HSA.of deductible value. Rental property I have middle of the road deductible $1000. Primary home has a lower deductible but I for the life of me cant remember what it is! lol I think its 500?
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Old 12-05-2019, 08:02 AM
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I work as an insurance adjuster. Out of all the claims that I have run, I have never heard anyone complaining about having paid a little extra to have a lower deductible. But I have seen a lot of disappointed people who have $15,000 in damage with a $10,000 deductible.

I ran a claim in Dallas where the guy had a 5% wind/hail deductible which amounted to $12,500 on what was probably a 1500 sf house. His roof and gutters were destroyed. I put everything on the estimate that I could and it barely made it over his deductible.

My neighbor had a $25,000 hurricane deductible on his house. We got hammered by hurricane Michael last year. He didn't make out too well.

There is nothing worse (as a sympathetic adjuster) than seeing someone with a high deductible who has a lot of damage to their house. They are under a lot of stress from the damage, and now they have to fork out a lot of money for a deductible. I can guarantee you that most of them would gladly go back and pay a couple of hundred extra each year to avoid it.
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Old 12-05-2019, 08:06 AM
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Originally Posted by rickpcfl View Post
... I can guarantee you that most of them would gladly go back and pay a couple of hundred extra each year to avoid it.
Yeah, but really that's not the issue. Assessing risk looking rearwards is kind of a no brainer.
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Old 12-05-2019, 09:46 AM
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Originally Posted by chrispnet View Post
Yeah, but really that's not the issue. Assessing risk looking rearwards is kind of a no brainer.
Sure. But because of those experiences it helps me (and others) make decisions looking forward too. Many of the people that I interacted with told me that they were going to lower their deductibles so that they wouldn't have to go through it again.

And you might be surprised how many people have multiple claims. I had quite a few people in Omaha Nebraska that had had their roofs replaced 3 times in a 6 year span due to hail storms. I worked two hail storms in Billings Montana this year. Probably 90% of the roofs were replaced after a previous big hail storm in 2014. And many of those had been replaced after a storm in 2010. So, looking back can help you plan when looking forward too.
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Old 12-05-2019, 01:27 PM
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by the way, moving HO insurance, to save a few bucks, might included unintended consequences. Especially if it has been with a same carrier for some time. Almost all carriers will inspect a new HO risk and could find issues a renewal carrier will not do/see
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Old 12-05-2019, 01:32 PM
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High deducible for vehicles, low for home owners.

Zero at fault claims in 11 years on vehicles, I'm saving $500/yr now by having a $1000 deductible vs a $100 deducible. However, my insurance is is also 1/3 of what it used to be - so I'd say I've saved easily 10k, probably more. If something happens I won't mind spending $1000 to cover it

For HO, I opted for to pay a little more yearly, and not have to worry about a 10-15k deductible ever hitting me if something happens
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