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Today we are discussing deductibles and when it makes sense for you to raise yours in order to save money on your insurance premium.  Let’s use an example where you have a $1,000 deductible and you want to consider whether moving to a $2,500 makes sense.  Remember, moving to that next step represents an additional $1,500 of risk you are assuming for each claim.

Our rule of thumb for the typical client is to try and save at least one-third of that added risk each year.  For our example, that would mean that if the premium went down at least $500 a year, the $1,500 increase in deductible would be recovered in three years or less.  We would then feel that the higher deductible was a good value to our client.  If the premium savings is any less than that, we would have second thoughts about recommending the change.

Please check with your agent to see what those savings might be and whether it would be of benefit to you.  I am Malcolm Brooker with the Brooker Insurance Agency, and that’s Making Insurance Work!

Posted 2:53 PM  View Comments

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