Question

I look at everyone and their insurance budgets--both house and auto--and I get a little envious. RI is terribly expensive for insurance, especially auto insurance. In fact, State Farm doesn't even do business here. Anyway, my policies renew early March so I gave them a call to see if I could save some money. If I get my policies via email, that is a 2% savings--$57 saved, no brainer. My auto insurance could decrease by $211 if I increase my deductible from $500 to $1000. Not sure if I am willing to do that. The agent put me on hold to recalculate the replacement cost of my house. Evidently there is some sort of inflation component that automatically gets calculated in. He used the new tool they have now and I will be saving $467 on my homeowners! I was a little leery, but he explained how it worked and I am psyched! So glad that I will be saving some money! What is your opinion on the auto insurance potential savings? Would you up your deductible? Why or why not? Thanks!  

Answer 1

Once I had a my first goal reached with my emergency fund and could afford a $1000 deductible, I upped mine. We saved $30 a month that way.  

Answer 2

I would up your deductible and hold the extra money in a savings account (put the $211 savings + an extra $289 to cover the different). Hopefully you never have to use it and the savings will grow as you earn interest.  

Answer 3

On the auto you policy premium decreases by $211 but your deductible goes up by $500. If you have the additional $500 to set aside to make up the difference then do it. It’ll take you just over two renewals to make up the savings.  

Answer 4

Is that a saving of $211 annually or monthly? In the event of a loss, could you afford to come up with $1000 versus $500? I'm in Canada but an insurance advisor. If you break $211 over 12 months its a roughly $17 a month savings. Would you put a claim in for something under $1000? For me personally I have $0 deductible. I'd rather pay a little more over the course of the year to have no deductible in the event of any loss. I think about the things I cannot control (impact with an animal, hail, fire etc)

Answer 5

I have a fully funded emergency fund. I have a higher deductible because I can afford the extra $500 in liability cost to me in order to save hundreds a year. It didn’t take long to pay out for me. So each month I go without an accident or claim is just more money in my pocket.  

Answer 6

Hello from a fellow rhode island resident!  I agree with everyone else above, if you have the extra money to cover the difference then definitely go with the higher deductible

Answer 7

We are about to travel/move across the US. I lowered my deductible and when I call to change my address I'll up it 1k. Just be sure you have the 1k per vehicle sitting in savings.  

Answer 8

I have mine set to $1000 of course a person hit me. so I refused to use my insurance it wasn’t huge damage but it wasn’t my fault so I fought his insurance company and am getting it taken care of without my insurance. I will keep it at $1000 and will make a sinking fund or an emergency savings envelope for that just in case.