Worth Raising Car Insurance Deductible?

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vanbog8712
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Worth Raising Car Insurance Deductible?

Post by vanbog8712 » Fri Mar 10, 2017 12:43 pm

Hi everyone,

My wife and I each have $100 comprehensive/$100 collision deductibles on our cars.

Her cost is $68/mo and mine $75/mo. If we raise our deductibles to $1000/$1000, her cost drops to $60/mo and mine to $65/mo. So we would collectively save $18/mo, which is $216/yr.

So the deductible would be $900 more if we made this change, and with the $216 annual savings, if we didn't file a claim any sooner than once every ~4 years ($900 / $216 = ~4), this would be an advantageous thing, right?

Neither of us have had a car insurance claim in a LONG time (10 years or so) and I don't know what is average for how frequently these things occur. Kind of seems like a no brainer on my above breakeven analysis (which hopefully I did correctly) to raise the deductible, right? I wonder if we should even raise it higher than $1K. State Farm allows up to $2K. We DO have the cash to cover a high deductible as our emergency fund is fully funded.

Jack FFR1846
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Re: Worth Raising Car Insurance Deductible?

Post by Jack FFR1846 » Fri Mar 10, 2017 12:47 pm

I look at risk. All of my cars have $1000 deductibles. I've considered dropping collision/comp but with one car at my son's college (bigger city, so higher vandalism risk) and a wife who occasionally hits things, I've left them all in place. My last accident was sometime in the 70's.
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flamesabers
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Re: Worth Raising Car Insurance Deductible?

Post by flamesabers » Fri Mar 10, 2017 12:51 pm

So long as you have the money to cover for the higher deductible, I think it's always a good idea to raise one's deductible to save on premiums. I did the same thing when I had collision/comp on my car.

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KlingKlang
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Re: Worth Raising Car Insurance Deductible?

Post by KlingKlang » Fri Mar 10, 2017 12:55 pm

Sounds perfectly reasonable to me. Let's face it, if you were in an accident where the damage could be repaired for only a few hundred dollars you probably wouldn't even report it to the insurance company. We have had $1000 deductibles in place for decades.

Our current quandary is whether to drop comprehensive and collision on the 13 year old cars that my wife and myself drive.

vanbog8712
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Re: Worth Raising Car Insurance Deductible?

Post by vanbog8712 » Fri Mar 10, 2017 12:56 pm

Thank you so far everyone. What about going up to State Farm's max of $2K deductible? It seems $1K is the sweet spot for most people.

MP123
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Re: Worth Raising Car Insurance Deductible?

Post by MP123 » Fri Mar 10, 2017 12:57 pm

Do you need the collision/comp? Liability only would reduce your rates even more I'd think.

vanbog8712
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Re: Worth Raising Car Insurance Deductible?

Post by vanbog8712 » Fri Mar 10, 2017 12:58 pm

MP123 wrote:Do you need the collision/comp? Liability only would reduce your rates even more I'd think.


Right, we do. One car is a 2013 Accord worth 13K or so maybe, and the other a 2006 Civic worth $3K maybe. I guess maybe the Civic doesn't need all that, but we plan to keep it for awhile as it's running well.

MP123
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Re: Worth Raising Car Insurance Deductible?

Post by MP123 » Fri Mar 10, 2017 1:05 pm

vanbog8712 wrote:
MP123 wrote:Do you need the collision/comp? Liability only would reduce your rates even more I'd think.


Right, we do. One car is a 2013 Accord worth 13K or so maybe, and the other a 2006 Civic worth $3K maybe. I guess maybe the Civic doesn't need all that, but we plan to keep it for awhile as it's running well.


Collision/comp with a $1-2k deductible on a $3k car doesn't seem like a good idea to me. I'd sure consider dropping that coverage. Maybe go to $2k deductible on the Accord.

That all assuming your emergency fund can cover replacing the cars if needed.

sport
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Re: Worth Raising Car Insurance Deductible?

Post by sport » Fri Mar 10, 2017 1:12 pm

You mention cost per month. If you are paying insurance monthly, you can reduce cost by paying semi-annually.

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BrandonBogle
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Re: Worth Raising Car Insurance Deductible?

Post by BrandonBogle » Fri Mar 10, 2017 1:23 pm

A few things:

1 - Drop Collision and Comp on the 2006 Civic
2 - If there is a service charge or fee to paying monthly (or a discount for paying in full), switch to paying the full term up front
3 - What about $500 deductible?*

* In my policy, I have $500 deductibles. For every 6 months, it would be $8 cheaper to go from $500 -> $1,000 deductible for comp/coll. Given that packing a lunch just one day saves me that, I just go with the $500 deductible in case I have an incident. Either way, I can pay the deductible without issue. So basically, perhaps you can get most of the same savings at $500 deductible instead of $1,000 if you are concerned about what would happen in the unlikely event you file a claim.

DSInvestor
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Re: Worth Raising Car Insurance Deductible?

Post by DSInvestor » Fri Mar 10, 2017 1:30 pm

I pay my insurance premiums in full. I pay every 6 months for auto insurance with GEICO. Check with your insurer to see if there is a cost difference for paying in full in one shot vs paying monthly. SInce you have a fully funded emergency cash reserves, paying in full may save a little extra as well. Do you also have home/renter's insurance/umbrella with your insurer? You can get multi-line discounts for have auto/home/umbrella with the same insurer.

If your insurer will accept payment by credit card at no extra cost, you can use a cash back credit card to pay your premiums. Every bit helps.

centrifuge41
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Re: Worth Raising Car Insurance Deductible?

Post by centrifuge41 » Fri Mar 10, 2017 1:34 pm

Yes, totally it to raise the deductible (or drop comprehensive/collision entirely)! The point of insurance is not to cover high frequency (but low $) events, such as the bulk of a $1k or $1500 car damage incident. The point is to cover super rare events that could potentially bankrupt you, or have you lose your house, etc.

So in addition to raising deductible, make sure you have enough coverage on the back. E.g. do you have 100/300k bodily injury? Should you be buying 250k/500k instead? (For me, at Geico, the difference is dimes per 6 month term). What about 25k property damage? Should you carry 50k or 100k instead? (Again, the difference is just a few bucks per 6 months, since these events are rare, but would be very impactful if they occur). At Geico, they even offer 2500 deductible comprehensive/collision, which is what we do for the newer of our 2 cars. The older one is liability only.

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dm200
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Re: Worth Raising Car Insurance Deductible?

Post by dm200 » Fri Mar 10, 2017 1:42 pm

For the last 30 years, my wife and I have had $1,000 deductible on Collision and Comprehensive. This saves quite a bit over time (on average).

fittan
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Re: Worth Raising Car Insurance Deductible?

Post by fittan » Fri Mar 10, 2017 2:30 pm

I agree with other posts. Raise to $1K deductible. Drop comprehensive and collision on the Civic. Consider increasing your liability and property damages.

Easy Rhino
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Re: Worth Raising Car Insurance Deductible?

Post by Easy Rhino » Fri Mar 10, 2017 2:59 pm

Emotionally, I wouldn't want a deductible over $500 because I would grumble too much when paying $1k.

However, I was all about dropping collision/comprehensive entirely when my car was worth under $5k.

There may be a disconnect in there, but I don't mind. :annoyed

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sunny_socal
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Re: Worth Raising Car Insurance Deductible?

Post by sunny_socal » Fri Mar 10, 2017 4:15 pm

I've had a $500 deductible for a very long time. I changed it to $1k to save money.

Shortly after that I had a small accident. Then I had another accident because I had switched to a larger vehicle (didn't have my commuter car available.) Now I'm back to a $500 deductible :happy

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gasdoc
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Re: Worth Raising Car Insurance Deductible?

Post by gasdoc » Sat Mar 11, 2017 8:59 am

We have had "liability only" coverage on all of our cars for the past ten years or so. We keep a fairly large emergency fund for various reasons. While it is painful to pay a claim oneself, it is liberating to not have the insurance company involved when dealing with the repair shops.

gasdoc

researcher
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Re: Worth Raising Car Insurance Deductible?

Post by researcher » Sat Mar 11, 2017 9:46 am

sunny_socal wrote:I've had a $500 deductible for a very long time. I changed it to $1k to save money.

Shortly after that I had a small accident. Then I had another accident because I had switched to a larger vehicle (didn't have my commuter car available.) Now I'm back to a $500 deductible :happy


Did you pay for those small accidents yourself or turn them into your insurance?

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sunny_socal
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Re: Worth Raising Car Insurance Deductible?

Post by sunny_socal » Sat Mar 11, 2017 10:46 am

researcher wrote:
sunny_socal wrote:I've had a $500 deductible for a very long time. I changed it to $1k to save money.

Shortly after that I had a small accident. Then I had another accident because I had switched to a larger vehicle (didn't have my commuter car available.) Now I'm back to a $500 deductible :happy


Did you pay for those small accidents yourself or turn them into your insurance?


Rear ended someone on the first so I went through insurance (no rate increase AFAIK.) The 2nd was small on my part, not even a scratch on my truck, but I munched the other guy badly enough that I'm sure it cost a few thousand. Through insurance there as well. Didn't do anything to 'fix' my vehicle in the 2nd case.

sport
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Re: Worth Raising Car Insurance Deductible?

Post by sport » Sat Mar 11, 2017 11:13 am

One thing has not yet been mentioned. If someone hits your car (it is their fault), and you do not have collision coverage, you get to negotiate with the other party's insurance yourself. If you have collision coverage, you can just put in a claim and your insurance will deal with the other insurance company.

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gasdoc
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Re: Worth Raising Car Insurance Deductible?

Post by gasdoc » Sat Mar 11, 2017 11:42 am

sport wrote:One thing has not yet been mentioned. If someone hits your car (it is their fault), and you do not have collision coverage, you get to negotiate with the other party's insurance yourself. If you have collision coverage, you can just put in a claim and your insurance will deal with the other insurance company.


sport,
If it involves damage to another party, the "liability" part kicks in, so your insurance company will be involved anyway. I believe that even if you have collision insurance, you will have to deal with whether the insurance amount awarded is appropriate. In addition, you will have to use their preferred repair shops, and deal with the repair delays as the insurance company dictates the type of after market "generic" parts that have to be tried because they cost less. Then, when they don't fit well, you have to deal with the delays. I've been there and done that back when I had collision insurance. Lastly, you get to decide if a car is truly "totaled," and you get to decide if it is worth repairing versus replacement. I like that.
gasdoc

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jharkin
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Re: Worth Raising Car Insurance Deductible?

Post by jharkin » Sat Mar 11, 2017 12:04 pm

gasdoc wrote:
sport wrote:One thing has not yet been mentioned. If someone hits your car (it is their fault), and you do not have collision coverage, you get to negotiate with the other party's insurance yourself. If you have collision coverage, you can just put in a claim and your insurance will deal with the other insurance company.


sport,
If it involves damage to another party, the "liability" part kicks in, so your insurance company will be involved anyway. I believe that even if you have collision insurance, you will have to deal with whether the insurance amount awarded is appropriate. In addition, you will have to use their preferred repair shops, and deal with the repair delays as the insurance company dictates the type of after market "generic" parts that have to be tried because they cost less. Then, when they don't fit well, you have to deal with the delays. I've been there and done that back when I had collision insurance. Lastly, you get to decide if a car is truly "totaled," and you get to decide if it is worth repairing versus replacement. I like that.
gasdoc



It also varies depending on whether or not you live in a no-fault state. I live in Mass which is a no fault state, and if somebody hits me I still call my own insurance and then they go after the other guys insurance.


Another vote for the highest deductibles you can stand. We carry 1000/1000 or 500/1000 if there is a loan on the car and the lender requires it (before you ask, at 0.9% interest I just dont feel like paying it off ;) )

Don't forget also that the deductibles only kick in if you cause the accident. In my entire driving life I dont think I've ever had a major at fault claim. The only major claims Ive ever had where situations where somebody hit me and they paid... and a few small dumb moves like bumping the curb in the city where it was my fault and I just paid out of pocket.

sport
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Re: Worth Raising Car Insurance Deductible?

Post by sport » Sat Mar 11, 2017 1:39 pm

gasdoc wrote:
sport wrote:One thing has not yet been mentioned. If someone hits your car (it is their fault), and you do not have collision coverage, you get to negotiate with the other party's insurance yourself. If you have collision coverage, you can just put in a claim and your insurance will deal with the other insurance company.


sport,
If it involves damage to another party, the "liability" part kicks in, so your insurance company will be involved anyway. I believe that even if you have collision insurance, you will have to deal with whether the insurance amount awarded is appropriate. In addition, you will have to use their preferred repair shops, and deal with the repair delays as the insurance company dictates the type of after market "generic" parts that have to be tried because they cost less. Then, when they don't fit well, you have to deal with the delays. I've been there and done that back when I had collision insurance. Lastly, you get to decide if a car is truly "totaled," and you get to decide if it is worth repairing versus replacement. I like that.
gasdoc

I would rather deal with my insurance company than someone else's. A few years ago, someone backed into my car while it was parked. I put in a collision claim with my company. After the repair was done at the shop of my choice, the insurance adjuster came to my house, looked at the repair job, and was not satisfied with the quality of the workmanship. He told me to take it back to the shop and have them fix it properly. I did as he suggested, and the shop corrected the repair at their expense. This care was taken with a repair job of less than $1000.

jumppilot
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Re: Worth Raising Car Insurance Deductible?

Post by jumppilot » Sat Mar 11, 2017 9:16 pm

I have a $100 deductable on all my cars, even my 15 year old beast. The cost difference between that and a higher deductable isn't much as all.

I don't like surprises and having to write a check for $500 or $1000 isn't worth just paying a few dollars more a month.

carolinaman
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Re: Worth Raising Car Insurance Deductible?

Post by carolinaman » Sun Mar 12, 2017 8:21 am

KlingKlang wrote:Sounds perfectly reasonable to me. Let's face it, if you were in an accident where the damage could be repaired for only a few hundred dollars you probably wouldn't even report it to the insurance company. We have had $1000 deductibles in place for decades.



+1. We have had a couple of fender benders in recent years and just paid out of pocket because damages were less than $1,000. As I understand insurance, the first one you report does not affect your premium and a 2nd incident will increase rates, possibly substantially.

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F150HD
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Re: Worth Raising Car Insurance Deductible?

Post by F150HD » Sun Mar 12, 2017 9:19 am

vanbog8712 wrote:Hi everyone,

My wife and I each have $100 comprehensive/$100 collision deductibles on our cars.

Her cost is $68/mo and mine $75/mo. If we raise our deductibles to $1000/$1000, her cost drops to $60/mo and mine to $65/mo. So we would collectively save $18/mo, which is $216/yr.


if the savings were greater I would, but for $18 a month, I'd stand pat.

Nate79
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Re: Worth Raising Car Insurance Deductible?

Post by Nate79 » Sun Mar 12, 2017 10:10 am

I would suggest to price out a deductible of $500 vs $1000 and see if that makes more sense.

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