typical advice for homeowner's insurance deductible?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
GordonG
Posts: 64
Joined: Mon Mar 23, 2015 2:24 pm

typical advice for homeowner's insurance deductible?

Post by GordonG » Wed Jan 23, 2019 10:47 pm

Just wondering what the usual advice is here? I'm thinking of doing $2500, but might go even higher. I have a large enough emergency fund that paying a bit out of pocket to save on premiums is OK with me.

boglerdude
Posts: 774
Joined: Fri Jul 10, 2015 1:28 am

Re: typical advice for homeowner's insurance deductible?

Post by boglerdude » Thu Jan 24, 2019 4:38 am

Gotta look at the numbers, often doesnt save as much as you'd expect. Also some insurers will not take you if you've had any claims in the last 5 years (an argument for using high deductible)

Rupert
Posts: 4122
Joined: Fri Aug 17, 2012 12:01 pm

Re: typical advice for homeowner's insurance deductible?

Post by Rupert » Thu Jan 24, 2019 7:37 am

Some insurance companies will let you do a percentage of the home's insured value, e.g., 2% or 5%.

User avatar
goingup
Posts: 3685
Joined: Tue Jan 26, 2010 1:02 pm

Re: typical advice for homeowner's insurance deductible?

Post by goingup » Thu Jan 24, 2019 9:55 am

I don't know what's typical but we've always had high deductible. Through USAA our Seattle-area home has $8K deductible with a $550 annual premium.

User avatar
dm200
Posts: 22405
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: typical advice for homeowner's insurance deductible?

Post by dm200 » Thu Jan 24, 2019 10:00 am

Rupert wrote:
Thu Jan 24, 2019 7:37 am
Some insurance companies will let you do a percentage of the home's insured value, e.g., 2% or 5%.
A few years ago, we went to a percentage of insured value for the deductible on out State Farm Homeowners policy. I cannot recall the percentage, but it was 1 or 2%. Our premiums went down quite a bit.

User avatar
SagaciousTraveler
Posts: 271
Joined: Thu May 03, 2018 6:05 am

Re: typical advice for homeowner's insurance deductible?

Post by SagaciousTraveler » Thu Jan 24, 2019 10:01 am

Our insurance offered discount on percentage of the home's insured value. We chose 2%.

As someone previously mentioned, its not a huge reduction in premium.

Perhaps more important, don't be like my friend and put it at the lowest deductible and try to use it for EVERY issue. Its a recipe to get dropped.

Sconie
Posts: 762
Joined: Sun Feb 07, 2010 10:23 am
Location: Arizona

Re: typical advice for homeowner's insurance deductible?

Post by Sconie » Thu Jan 24, 2019 10:07 am

We use Ameriprise/Costco for our house here in AZ, as well as our summer place up on Lake Superior in MI. Just this past month we increased the deductible on both places from $500 to $1000....there didn't appear to be "equivalent" (offsetting?) savings associated with increasing the deductible much beyond $1K. YMMV.....
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

Sconie
Posts: 762
Joined: Sun Feb 07, 2010 10:23 am
Location: Arizona

Re: typical advice for homeowner's insurance deductible?

Post by Sconie » Thu Jan 24, 2019 10:08 am

SagaciousTraveler wrote:
Thu Jan 24, 2019 10:01 am


Perhaps more important, don't be like my friend and put it at the lowest deductible and try to use it for EVERY issue. Its a recipe to get dropped.
Exactly.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

Topic Author
GordonG
Posts: 64
Joined: Mon Mar 23, 2015 2:24 pm

Re: typical advice for homeowner's insurance deductible?

Post by GordonG » Thu Jan 24, 2019 10:09 am

SagaciousTraveler wrote:
Thu Jan 24, 2019 10:01 am
Our insurance offered discount on percentage of the home's insured value. We chose 2%.

As someone previously mentioned, its not a huge reduction in premium.

Perhaps more important, don't be like my friend and put it at the lowest deductible and try to use it for EVERY issue. Its a recipe to get dropped.
Thanks. Yeah, I only plan on using it for MAJOR things, like if the house is destroyed, or a tree falls on it or something. I will just take care of the little things myself.

User avatar
dm200
Posts: 22405
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: typical advice for homeowner's insurance deductible?

Post by dm200 » Thu Jan 24, 2019 10:09 am

Sconie wrote:
Thu Jan 24, 2019 10:08 am
SagaciousTraveler wrote:
Thu Jan 24, 2019 10:01 am
Perhaps more important, don't be like my friend and put it at the lowest deductible and try to use it for EVERY issue. Its a recipe to get dropped.
Exactly.
Yes!!

NJ_Bogler
Posts: 32
Joined: Mon Oct 01, 2018 3:43 pm

Re: typical advice for homeowner's insurance deductible?

Post by NJ_Bogler » Thu Jan 24, 2019 12:54 pm

I just raised mine to $5,000. My premium went down by a couple hundred bucks, but YMMV.

I previously had a $2,500 deductible, but had been shopping around for a better rate. My thought process was, "Will I ever submit a claim for $4,000?" The answer was no (because submitting a claim could lead to getting dropped, or higher premiums in subsequent years, and I could handle the expense out-of-pocket). What about a $5k claim? $6k?

I don't know what the top # is for me, but I figured it was high enough to justify a higher deductible with lower premiums. With a $5k deductible, I suspect it would need to be $8k or higher in costs to file a claim.

mhalley
Posts: 7692
Joined: Tue Nov 20, 2007 6:02 am

Re: typical advice for homeowner's insurance deductible?

Post by mhalley » Thu Jan 24, 2019 1:03 pm

My understanding is that you don’t want to make a claim unless there is a catastrophic amount involved as many insurance co will really jack up your rates after a claim. In addition, the claim might go on your clue report so even going with another co is difficult. So you want the deductable as high as you can possibly affierd.

Post Reply