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Can Raising Your Insurance Deductible Save You Money?

May 29, 2014

If you drive a car in Massachusetts, you are required to have insurance on your car. If you own a home and have a mortgage, you are required to have insurance on your home. To many people, insurance is a "necessary evil", if you ask me, it is a necessity we should be thankful for. Many people around the world do not have the option to purchase insurance or cannot afford to purchase insurance, to protect their valuables. If their house burns down, they have to rebuild, without money from an insurance company.

This is starting to change with the implementation of microinsurance. In fact, a friend of mine started a wonderful company that offers insurance to people in developing countries, but more on that another day.

Back to saving you money.

Do you know you have a deductible? Do you know what a deductible is?

Taken directly from the dictionary:



(in an insurance policy) a specified amount of money that the insured must pay before an insurance company will pay a claim.

Taken directly from the dictionary:

Did you know if you submit a claim (request for payment) to an insurance company, and you are approved for said claim, they will send you a check minus the deductible?

Get your homeowner, renter or auto policy right now. I'll wait.

You have it? Ok. Look on the "Coverage Selections Page". What is your deductible? Many people have a $500 deductible. Some people have a $250 deductible on their renter policy and they may have a $1,000 deductible on their homeowner policy.

Would you put in a claim for $750 or for $7,500? Most people would say they would rather pay $750 out of pocket and put in a claim for $7,500.

If you have a $500 deductible, call your insurance agent and ask them how much you can save by increasing your deductible to $1,000 or $2,500. You may save $100-$200/year which is $10/month - $20/month. It's worth a shot.