In an attempt to lower our overall monthly expenses, I recently called my insurance agent to see how our annual cost would change if we increased our deductible from the current $500 to $1000.
The agent clarified something for me that I did not know. There are actually two deductibles, one for comprehensive and one for collision. Both of mine are set at $500. If I increased comprehensive to $1000, I would only save $12 a year, but if I increased collision to $1000 a year, I would save $50. Considering we have had to use our car insurance twice in the last 18 months (once because someone hit us while we were stopped at a light and once because a vandal smashed in our window), I decided not to raise either deductible.
Our of curiousity, I asked what it would cost to lower the comprehensive to a 0 dollar deductible and was surprised to find that it would only cost $10 more. Considering that we live in an urban area and cannot protect our vehicle with a garage, it may be well worth our while to change the coverage. At this rate, it would take 50 years with no vandal damage to the car for this not to pay for itself. Had we had a 0 deductible on comprehensive since we moved here, we would have only paid an extra $120 over 10 years! That well would have paid for itself when our window was smashed and our car door damaged in October.
Financial experts always advice you to increase the insurance deductible as much as you comfortably can, but in our case, it might just make sense to lower the comprehensive deductible.
A couple things you are not taking into account: one is the increased cost of insurance if you have several claims (even small ones). They may not raise your rates, but you might lose the credits on your policy for being “claim free.”
Also, a company can tell you that they will not allow a $0 deductible if you use it too often; they can do the same thing with “full glass” coverage. Insurance is supposed to cover losses that you would not be able to afford on your own, so they don’t want to be paying a lot of small claims.
Finally, if you want to move your insurance elsewhere, having multiple claims can make that more difficult. Obviously it depends on the type of claim. The ones you cited would probably not be a problem, because you are not at fault, but that might not be the case for other people.
One thing I WOULD highly recommend to people is to get their insurance quoted regularly (every 3 years or so, or if you have a large increase with your current carrier) with other companies. If you are with an independent agent, they have access to many different companies, so you wouldn’t even have to call someone new – just ask them to do a comparison. If you are with a captive agent (State Farm, Farmers, etc) you will have to call someone else to give you a quote. This is one of the best ways to make sure you aren’t overpaying on your insurance.
Just a little perspective from someone who works with insurance every day. 🙂
Thanks for the advice. Since we had a $500 deductible on the window, we were going to cover it ourselves, but the dummy who broke in was inexperienced (as the repair shop told us). First he tried to break into our back passenger slide door, then the front passenger door, then he finally gave up and broke the glass. He caused over $1,500 in damage, so it turned out not to be as cheap as we thought, which is why we filed the claim. Before these two incidents, we had had no claims in 8 years.
This is eye opening. I would have never imagined you could get a $0 comprehensive deductible for just $10 a year. In your case, it sounds like a smart move.