Isn’t A Low Deductible Better?

Only if you expect to have a lot of claims! A low deductible suggests that you expect to have more claims than the average person. Bet you didn’t realize that, but it’s true!

See, insurance companies are smart. They know how often claims happen on average and they also know that you probably don’t know what that average is.

That’s where we can help! Our Deductible Savings Calculator will show you how much you can save on your home insurance if you raise your deductible. Then, we compare that to how much it could cost you depending on whether you are a better or worse risk than average.

What you’ll likely find is, if you think you are even an average risk, you are usually better off with a higher deductible.

What’s The Risk?

About 6% of homes have a claim every year, so a simple way to think about it is you should probably expect a claim once every 15 to 20 years. (It’s actually a little more complicated than that since some people have more than one claim.)

But insurance companies price deductibles as if you will have a claim once every 10 years, or even less. So if you buy a homeowners policy with a low deductible (and if you can afford a higher one), you are agreeing with the insurance company that you will have a claim within 10 years.

In other words, you are suggesting you’re a worse risk than your neighbor. Of course, the insurance company doesn’t want to make you aware of this because they make money convincing you to buy a policy with a low deductible. 

What Does This Mean For You? 

1. If you raise your deductible, you’ll likely save money in the short- and long-term.

2. You will be less likely to file a small claim, which is also often a good decision. You can read more about that here.

So believe in yourself! It can save you money!

Want To Know More?

Interested in learning more about the math behind our conclusions and how to make it work in your favor? Email us at calculator@informedinsurance.com and we can answer all your questions.