Should you adjust your deductible?
The insurance deductible is the portion of the bill for which you’re responsible in the event of a covered loss, such as an accident or a theft. Your insurance company deducts the amount from the settlement you receive, which explains its name.
Two factors will determine whether you should adjust your deductible: your finances and your driving habits.
- Finances: Review your budget to make sure you could pay the deductible in the event of an accident.
- Driving Habits: If you have a reoccurring history of having accidents, the more likely you are to have another; therefore, it makes sense to keep a lower deductible.
The higher you set your insurance deductible, the lower your premiums will be. Another factor in favor of a higher deductible is that having to pay a deductible is not a certainty because you may not ever have an accident or other claim. On the other hand, premiums are an absolute certainty – you have to pay your premiums in order to maintain coverage so, it may make sense to take more of a financial risk with your deductible.
We looked at 3 of our carriers – to give you an idea of the savings by carrying a higher deductible amount. Please be aware that these figures are based upon an average home in Waukesha county with 3 cars on an annual basis.
Wisconsin residents, for more information on saving money on your auto & home insurance, contact a knowledgebroker.