- Oct 9, 1999
- 21,020
- 156
- 106
With both car and homeowner's insurance rates going up fast, and even faster if you have claims, it's probably a good idea to raise your deductibles to the highest level you can live with.
Our homeowner's insurance renewal went up 20% for next year and we've never had a claim. They also added mandatory surcharges based on the number of claims over a period of time and capped water damage claims to a maximum of $5K.
A couple weeks ago my wife bumped into another car while leaving a parking lot and after talking to the agent, he said we'd be better off paying the $800 repair out of our own pocket because if we filed a claim, our premium would go up $300 or more a year for three years.
The idea of insurance is to have protection against losses that you can't afford to pay for, not to have zero out-of-pocket cost in case of a claim. You can put money in your pocket by raising your deductible, or use the savings to have more coverage in other areas like liability.
Also keep in mind that insurance companies are tracking homeowner insurance claims by each property. If you're buying a house and the previous owner had insurance claims, that could possibly affect your ability to get insurance on the house because all insurance companies can see the claims history on that property. They are especially paranoid about water damage - and if someone calls the insurance company to just ask about coverage on a water damage situation, the company could put that on the record even if a claim isn't filed.
So in our case, we'll raise our deductibles to the amount that we are willing to cover on our own, and set aside the savings as a separate fund to be used if we need it. Changing your deductible from $200 to $500 could save you 15-30%.
Our homeowner's insurance renewal went up 20% for next year and we've never had a claim. They also added mandatory surcharges based on the number of claims over a period of time and capped water damage claims to a maximum of $5K.
A couple weeks ago my wife bumped into another car while leaving a parking lot and after talking to the agent, he said we'd be better off paying the $800 repair out of our own pocket because if we filed a claim, our premium would go up $300 or more a year for three years.
The idea of insurance is to have protection against losses that you can't afford to pay for, not to have zero out-of-pocket cost in case of a claim. You can put money in your pocket by raising your deductible, or use the savings to have more coverage in other areas like liability.
Also keep in mind that insurance companies are tracking homeowner insurance claims by each property. If you're buying a house and the previous owner had insurance claims, that could possibly affect your ability to get insurance on the house because all insurance companies can see the claims history on that property. They are especially paranoid about water damage - and if someone calls the insurance company to just ask about coverage on a water damage situation, the company could put that on the record even if a claim isn't filed.
So in our case, we'll raise our deductibles to the amount that we are willing to cover on our own, and set aside the savings as a separate fund to be used if we need it. Changing your deductible from $200 to $500 could save you 15-30%.
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