Insurance Deductibles: Savings Now vs. Later

One of the biggest factors of the price of your car or home insurance is your deductibles. The higher your deductible, the cheaper the insurance will be, but the more you will have to pay out of pocket if you have a claim. With some simple math, you can figure out for yourself if the savings are worth the higher deductible.

 Picture this scenario on your car insurance: If you have a $500 deductible you will have to pay $120 a month, but with a $1,000 deductible you will only have to pay $100 a month. So you save $20 a month, but if you get in an accident, you have to pay $500 more. That’s equal to 25 months of your $20 savings.

 How likely are you to go over 2 years without an accident?

A lot of times, the difference will be less than $20 a month.

 On homeowners insurance, it’s almost never worth it to have a higher deductible. If you have a $200,000 house, changing your deductible from 1% to 2% would raise your deductible by $2,000, and might not even save you $100 for the year. That means you would have to go 20 years without a claim for that to be the cheaper option.

 In Texas, your chances of not having a roof claim for 20 years are virtually 0. So, in this case, it’s almost always better to keep a lower deductible.

If you ever have any questions about insurance, don’t hesitate to reach out to Integrity!


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