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Don't Risk a Lot In Order to Save a Little (Fall 2009) << Back
As money gets increasingly tight, consumers are trying to save money wherever and whenever they can. Insurance policies are one place that people typically look to cut costs. But, are there ways you can save when it comes to insurance without jeopardizing your coverage?
Many insureds believe so. More customers are now requesting a reduction in the dwelling limits on their homeowners policy or a reduction in the policy's liability limits. Some customers are even requesting a reduction in the limits of liability on their auto insurance policies. In most cases, these types of requests are not wise ones. We cannot stress enough how much you have to lose if a liability judgment goes against you, for example, in an auto accident where you are at fault or if someone gets hurt at your home.
A wiser and certainly more consumer-friendly way to save money on your insurance premiums is to increase your property deductibles. On a homeowners policy, going from a $250 to $500 deductible may result in a savings of between 10 and 15% depending on the company you are currently insured with. We understand that when you have a claim you will have to come up with $500 at one time. However, the important thing to remember is this: you only have to come up with $250 more than you would right now (the difference between your current deductible and your new $500 deductible), not a big amount. And remember, with the savings you will experience in the premium, you will probably save the $250 in less than two years.
A $1,000 deductible may even save you 40%.
If you cannot take the big leap from a $250 deductible to $1,000, consider a graduated approach. How about going to a $500 deductible now and putting the premium you save into a "deductible fund". Then in a couple of years, you will have enough in that fund to increase your deductibles to $1,000.
The point of all this again: don't risk a lot in order to save a little.
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AHTKY Insurance Agency, LLC
1451 W. Artesia Blvd, Suite A, Gardena, California 90248
CA License: 0C46036