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Should I raise my homeowner's insurance deductible?
Posted by: Psurfer
Date: March 19, 2010 11:51AM
I called my ins the other day re an unrelated billing issue, and the agent tried at length to persuade me to raise the deductible, which is currently at $500. He says this will save me $100+/yr, so ~15%

His hard-sell made me think there must be some reason for me Not to do it.
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Re: Should I raise my homeowner's insurance deductible?
Posted by: cbelt3
Date: March 19, 2010 12:02PM
Most people I know set theirs at $1K, making it 'catastrophic' insurance. I figure it stops me from having to think about the 'should I call my insurance company' factor when something small happens. The bastiches always raise your rates anyway.
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Re: Should I raise my homeowner's insurance deductible?
Posted by: Jimmypoo
Date: March 19, 2010 12:07PM
if you raise it to $1000, that $100 a year LESS that the insurance company gets from you is offset
by the AT LEAST $100 that they have to spend to process a claim that comes up less than your
deductible.

Therefore, they'd just assume you raise it and know for certain "nah... this ain't worth $1000" and not
call them at all. In the long run, the more people that have $1000, means they can lay off 35% of their
call center workers.

It's all part of a grand strategy, I'm certain.
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Re: Should I raise my homeowner's insurance deductible?
Posted by: OWC Larry
Date: March 19, 2010 12:10PM
forgetting about potential interest/income earned on having the $100 per year at your disposal (or interest savings if redirected at outstanding debt) - you're dead even if you make an average of 1 claim every 5 years. looking at long term - and considering few people end up making many or any claims over a lifetime - money ahead.



OWC Larry
Other World Computing
[www.macsales.com]
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Re: Should I raise my homeowner's insurance deductible?
Posted by: Ammo
Date: March 19, 2010 12:14PM
Something that I hear a lot is that you shouldn't file small claims on your homeowner's policy because the total number of claims you file can be used to justify raising your rates. In other words, why risk making small claims - wait until you have a big one, like replacing your roof. Is this true? If so, wouldn't it make sense to raise your deductible as high as you are comfortable with?
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Re: Should I raise my homeowner's insurance deductible?
Posted by: C(-)ris
Date: March 19, 2010 12:15PM
I would think that it would make sense as long as you don't have a claim in the next 5 years....



C(-)ris
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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Re: Should I raise my homeowner's insurance deductible?
Posted by: davester
Date: March 19, 2010 12:18PM
It's a no brainer to max out your deductible. Every consumer article I've ever read on insurance says to do so. Insurance should be for catastrophes that seldom strike. The math never works out when you insure for the day to day (or year to year) stuff since the insurer has to bill to cover all those costs plus profit plus cost of doing business plus claims costs. Not only will you likely realize a substantial direct savings by raising the deductible, but if you make a claim or two on your homeowners insurance there is a good chance they will raise your rates (or in some cases they will cancel you). Given those risks, it is plain dumb in my opinion to make claims of less than $1,000. Heck, if they offered it I'd probably go with a $2,000 deductible.




"In science it often happens that scientists say, 'You know that's a really good argument; my position is mistaken,' and then they would actually change their minds and you never hear that old view from them again. They really do it. It doesn't happen as often as it should, because scientists are human and change is sometimes painful. But it happens every day. I cannot recall the last time something like that happened in politics or religion." (1987) -- Carl Sagan
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Re: Should I raise my homeowner's insurance deductible?
Posted by: Winston
Date: March 19, 2010 12:21PM
I think the way our homeowner's works is that we have a relatively high deductible (I think $2000) but above a certain amount the deductible goes away. This discourages small claims, but gives us full coverage if something big happens (like the couple of trees which have landed on the house over the years).

I generally favor high(er) deductible insurance. It should save you money in the long run, as Larry points out.


Good luck.

- Winston



------------------------
Be seeing you.
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Re: Should I raise my homeowner's insurance deductible?
Posted by: AlphaDog
Date: March 19, 2010 01:34PM
Quote
Psurfer
His hard-sell made me think there must be some reason for me Not to do it.

This is pathetic. The poor guy is trying to save you money, and you don't even believe him. I guess it's just more popular to assume everybody and their third cousin once removed is out to screw you and take away your hard earned money, huh - especially if they make their living selling something?
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Re: Should I raise my homeowner's insurance deductible?
Posted by: Winston
Date: March 19, 2010 02:15PM
Quote
AlphaDog
Quote
Psurfer
His hard-sell made me think there must be some reason for me Not to do it.

This is pathetic. The poor guy is trying to save you money, and you don't even believe him. I guess it's just more popular to assume everybody and their third cousin once removed is out to screw you and take away your hard earned money, huh - especially if they make their living selling something?

Um, but that's exactly what they are trying to do, much of the time. It doesn't mean this is inherently a bad deal, but it does pay to remain skeptical.

Do you buy protection packages and extended warranties at car dealers? They're sold as being a good deal for the customer too, but they are not in most cases. Giving a hard sell is often an indication that someone is trying to sell you something which is not in your best interest (or at least not the best deal you could get if you looked around).


- W



------------------------
Be seeing you.
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Re: Should I raise my homeowner's insurance deductible?
Posted by: Psurfer
Date: March 19, 2010 03:20PM
I'm leaning towards the higher deductbl, but still mulling over the decision, influenced by my first & only claim a couple of years ago, which was for a significant amount -basement flood. (Don't plan on a repeat of that now, w/ bi-annual Roto-Rooter appmts...).

"Pathetic"? Maybe unfortunate: that I've learned to generally distrust the motives of insurance companies.

Good to hear the range of opinion, thanks.
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Re: Should I raise my homeowner's insurance deductible?
Posted by: Acer
Date: March 19, 2010 04:03PM
Go for the higher deductible--as long as you can cover the deductible with your normal savings so you don't get caught short in case you do have an expense. Think of it as small scale "self-insurance."
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Re: Should I raise my homeowner's insurance deductible?
Posted by: clay
Date: March 19, 2010 04:41PM
what a coincidence--just got my homeowners policy renewal in the mail today. Our deductible is $500 as well. I'm thinking of increasing it as well, and making a few other adjustments that should save us money in the long run.
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Re: Should I raise my homeowner's insurance deductible?
Posted by: Psurfer
Date: March 19, 2010 05:59PM
correction: I meant biennial Roto-Rooters, as in once every 2 yrs.

Quote
Psurfer
...basement flood. (Don't plan on a repeat of that now, w/ bi-annual Roto-Rooter appmts...).



Edited 1 time(s). Last edit at 03/19/2010 05:59PM by Psurfer.
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Re: Should I raise my homeowner's insurance deductible?
Posted by: wurm
Date: March 19, 2010 07:09PM
Hell, we raised ours to $2500 last year. Realistically, we won't make a claim for anything less than something fairly catastrophic.
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