Does anyone offer ultra-high deductible insurance plans?

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knightrider
Posts: 542
Joined: Fri Jun 06, 2014 11:20 am

Does anyone offer ultra-high deductible insurance plans?

Post by knightrider » Wed Sep 11, 2019 9:36 am

I have everything with State Farm ( auto,home and umbrella ) and their highest deductible is only $5k. I was hoping they had something like $20k or even higher. I wonder why no one offers that? The premiums would be very low and you would save $$$$ over the course of your lifetime.

A lot of the insurance premiums go towards the overhead of paying small claims under $1000. Those help people who live paycheck to paycheck. For people with a lot of savings the needs are vastly different. I am only interested in catastrophic insurance.

Surely I am not the only person who can afford to lose $20k without it impacting my financial situation?
Last edited by knightrider on Wed Sep 11, 2019 9:45 am, edited 2 times in total.

niceguy7376
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by niceguy7376 » Wed Sep 11, 2019 9:39 am

Is it Auto or Home or some other type of insurance we are talking about?

rkhusky
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by rkhusky » Wed Sep 11, 2019 9:41 am

knightrider wrote:
Wed Sep 11, 2019 9:36 am
I have everything with State Farm and their highest deductible is only $5k. I was hoping they had something like $20k or even higher. I wonder why no one offers that? The premiums would be very low and you would save $$$$ over the course of your lifetime. A lot of the premiums you pay for insurance go towards the overhead of paying small claims under $1000. I am only interested in catastrophic insurance.

Surely I am not the only person who can afford to lose $20k without it impacting my financial situation?
The ACA put limits on catastrophic plans:
https://www.healthinsurance.org/faqs/wh ... -eligible/

BruDude
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Location: Las Vegas

Re: Does anyone offer ultra-high deductible insurance plans?

Post by BruDude » Wed Sep 11, 2019 10:02 am

Chubb is your best bet for something like this: https://www.chubb.com/us-en/individuals ... /home.aspx

furikake
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by furikake » Wed Sep 11, 2019 10:26 am

I think it depends on your state. We have State Farm too, and our deductible is higher than yours, and we can go even higher if we choose to.

Jags4186
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by Jags4186 » Wed Sep 11, 2019 10:30 am

knightrider wrote:
Wed Sep 11, 2019 9:36 am
I have everything with State Farm ( auto,home and umbrella ) and their highest deductible is only $5k. I was hoping they had something like $20k or even higher. I wonder why no one offers that? The premiums would be very low and you would save $$$$ over the course of your lifetime.

A lot of the insurance premiums go towards the overhead of paying small claims under $1000. Those help people who live paycheck to paycheck. For people with a lot of savings the needs are vastly different. I am only interested in catastrophic insurance.

Surely I am not the only person who can afford to lose $20k without it impacting my financial situation?
My homeowners insurance is $770/yr with a $1k deductible. Let’s say I raised my deductible to $20k...what realistically could my premium drop to? $350? $200?

Let’s say it’s $200... I’d have to go over 33 years without any problems to break even. It’s just not worth it the risk.

megabad
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by megabad » Wed Sep 11, 2019 10:42 am

Jags4186 wrote:
Wed Sep 11, 2019 10:30 am
knightrider wrote:
Wed Sep 11, 2019 9:36 am
I have everything with State Farm ( auto,home and umbrella ) and their highest deductible is only $5k. I was hoping they had something like $20k or even higher. I wonder why no one offers that? The premiums would be very low and you would save $$$$ over the course of your lifetime.

A lot of the insurance premiums go towards the overhead of paying small claims under $1000. Those help people who live paycheck to paycheck. For people with a lot of savings the needs are vastly different. I am only interested in catastrophic insurance.

Surely I am not the only person who can afford to lose $20k without it impacting my financial situation?
My homeowners insurance is $770/yr with a $1k deductible. Let’s say I raised my deductible to $20k...what realistically could my premium drop to? $350? $200?

Let’s say it’s $200... I’d have to go over 33 years without any problems to break even. It’s just not worth it the risk.
Just wanted to point out that the deductible is not the only money you could be on the hook for. If you (or more accurately, your house) becomes claim hungry, the insurance company is free to raise your premiums, and may even boot you from coverage all together and blacklist you with all other insurers.

So, the main reason I suggest a high deductible is that no one should ever submit a small claim. Basically, there is no payback period, you are just throwing your money down the drain if you never have a small claim. The only exception is that some mortgage providers require low deductibles. It is still foolish to get a low deductible in that circumstance but rules are rules if you want the mortgage. Just my 2 cents.

Jags4186
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by Jags4186 » Wed Sep 11, 2019 11:03 am

megabad wrote:
Wed Sep 11, 2019 10:42 am
Jags4186 wrote:
Wed Sep 11, 2019 10:30 am
knightrider wrote:
Wed Sep 11, 2019 9:36 am
I have everything with State Farm ( auto,home and umbrella ) and their highest deductible is only $5k. I was hoping they had something like $20k or even higher. I wonder why no one offers that? The premiums would be very low and you would save $$$$ over the course of your lifetime.

A lot of the insurance premiums go towards the overhead of paying small claims under $1000. Those help people who live paycheck to paycheck. For people with a lot of savings the needs are vastly different. I am only interested in catastrophic insurance.

Surely I am not the only person who can afford to lose $20k without it impacting my financial situation?
My homeowners insurance is $770/yr with a $1k deductible. Let’s say I raised my deductible to $20k...what realistically could my premium drop to? $350? $200?

Let’s say it’s $200... I’d have to go over 33 years without any problems to break even. It’s just not worth it the risk.
Just wanted to point out that the deductible is not the only money you could be on the hook for. If you (or more accurately, your house) becomes claim hungry, the insurance company is free to raise your premiums, and may even boot you from coverage all together and blacklist you with all other insurers.

So, the main reason I suggest a high deductible is that no one should ever submit a small claim. Basically, there is no payback period, you are just throwing your money down the drain if you never have a small claim. The only exception is that some mortgage providers require low deductibles. It is still foolish to get a low deductible in that circumstance but rules are rules if you want the mortgage. Just my 2 cents.
I understand the premise. But combining examples, if I have a $10k problem I would rather pay my $1k deductible, have $9k in my pocket and worry about having to find a different insurer in case I’m dropped or my rates spike than pony up $10k. Even though I can afford $10k.

EnjoyIt
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by EnjoyIt » Wed Sep 11, 2019 11:06 am

Jags4186 wrote:
Wed Sep 11, 2019 10:30 am
knightrider wrote:
Wed Sep 11, 2019 9:36 am
I have everything with State Farm ( auto,home and umbrella ) and their highest deductible is only $5k. I was hoping they had something like $20k or even higher. I wonder why no one offers that? The premiums would be very low and you would save $$$$ over the course of your lifetime.

A lot of the insurance premiums go towards the overhead of paying small claims under $1000. Those help people who live paycheck to paycheck. For people with a lot of savings the needs are vastly different. I am only interested in catastrophic insurance.

Surely I am not the only person who can afford to lose $20k without it impacting my financial situation?
My homeowners insurance is $770/yr with a $1k deductible. Let’s say I raised my deductible to $20k...what realistically could my premium drop to? $350? $200?

Let’s say it’s $200... I’d have to go over 33 years without any problems to break even. It’s just not worth it the risk.
Our homeowner's insurance is multiples higher than yours because that is what insurance is in our area. A 50% reduction would be a big deal.

Jags4186
Posts: 3683
Joined: Wed Jun 18, 2014 7:12 pm

Re: Does anyone offer ultra-high deductible insurance plans?

Post by Jags4186 » Wed Sep 11, 2019 11:41 am

EnjoyIt wrote:
Wed Sep 11, 2019 11:06 am
Our homeowner's insurance is multiples higher than yours because that is what insurance is in our area. A 50% reduction would be a big deal.
Of course, you need to do your own risk/reward or breakeven analysis. If you’re HO premium is $5,000/yr, dropping to $2,500/yr is a big deal. In fact, $2500 can fix an awful lot of little issues throughout the year. My hypothetical $500 savings doesn’t fix much of anything.

Topic Author
knightrider
Posts: 542
Joined: Fri Jun 06, 2014 11:20 am

Re: Does anyone offer ultra-high deductible insurance plans?

Post by knightrider » Wed Sep 11, 2019 1:14 pm

Jags4186 wrote:
Wed Sep 11, 2019 10:30 am
My homeowners insurance is $770/yr with a $1k deductible. Let’s say I raised my deductible to $20k...what realistically could my premium drop to? $350? $200?

Let’s say it’s $200... I’d have to go over 33 years without any problems to break even. It’s just not worth it the risk.
The risk of you having 20k worth of claims over 33 years is very small. Most people have no claims.

People mistakenly think it is somehow "cheaper" to have an insurance company pay for a claim. They forget these companies have huge overheads and insure many irresponsible clients . On top of that there is insurance fraud. So they pass all these costs to you in the form of high premiums..

Over 33 years you will be throwing away 15-20k in money with 100% certainty.. Most people would prefer this to the ~10% chance of paying 15-20k for one catastrophic event.. Human psychology makes no sense :-)

Tamales
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by Tamales » Wed Sep 11, 2019 2:04 pm

There would be people who really could not pay the high deductible, but sign up anyway because of lower premiums. That just feeds the subsidy aspect of it. Unless ultra high deductibles were subject to financial qualification.

Jags4186
Posts: 3683
Joined: Wed Jun 18, 2014 7:12 pm

Re: Does anyone offer ultra-high deductible insurance plans?

Post by Jags4186 » Wed Sep 11, 2019 3:47 pm

knightrider wrote:
Wed Sep 11, 2019 1:14 pm
Jags4186 wrote:
Wed Sep 11, 2019 10:30 am
My homeowners insurance is $770/yr with a $1k deductible. Let’s say I raised my deductible to $20k...what realistically could my premium drop to? $350? $200?

Let’s say it’s $200... I’d have to go over 33 years without any problems to break even. It’s just not worth it the risk.
The risk of you having 20k worth of claims over 33 years is very small. Most people have no claims.

People mistakenly think it is somehow "cheaper" to have an insurance company pay for a claim. They forget these companies have huge overheads and insure many irresponsible clients . On top of that there is insurance fraud. So they pass all these costs to you in the form of high premiums..

Over 33 years you will be throwing away 15-20k in money with 100% certainty.. Most people would prefer this to the ~10% chance of paying 15-20k for one catastrophic event.. Human psychology makes no sense :-)
It’s always cheaper not to have insurance if nothing happens whether your deductible is $0 or $1,000,000. And it is cheaper for insurance companies to pay a claim than for you to pay a claim. If you pay $10,000 in premiums to get $50,000 in claims, it’s $40,000 cheaper. The only time insurance isn’t worth it is when you have no claims. Generally, the people with no claims “lose” the people who have claims “win”.

Insurance can be and often is mispriced. For example flood insurance and long term care insurance are two high profile mispriced insurances one could carry. You need to know your house which your insurer can’t possibly know. My homeowners policy has no idea that there are 10 trees that could potentially fall on my house. They’ve never been to my house or asked about the landscaping. With the increased intensity of storms, there is in my opinion a decent chance something happens to my home in the next 33 years—and that hasn’t been priced into my premium.

Like I said, I carry a $1000 deductible. If I had a $1200 problem I wouldn’t file a claim. If I had a $5000 problem I would. Not because I don’t have $5000, but because I’d rather pay a few dozen dollars more a year to avoid a potential $5000 expense.
Last edited by Jags4186 on Wed Sep 11, 2019 3:50 pm, edited 2 times in total.

Topic Author
knightrider
Posts: 542
Joined: Fri Jun 06, 2014 11:20 am

Re: Does anyone offer ultra-high deductible insurance plans?

Post by knightrider » Wed Sep 11, 2019 3:48 pm

Tamales wrote:
Wed Sep 11, 2019 2:04 pm
There would be people who really could not pay the high deductible, but sign up anyway because of lower premiums. That just feeds the subsidy aspect of it. Unless ultra high deductibles were subject to financial qualification.
Not sure I am following you here. I would think if they don't pay the deducible their claim won't be processed ( sorry for the double negatives )...

megabad
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by megabad » Wed Sep 11, 2019 5:42 pm

Jags4186 wrote:
Wed Sep 11, 2019 3:47 pm

Like I said, I carry a $1000 deductible. If I had a $1200 problem I wouldn’t file a claim. If I had a $5000 problem I would. Not because I don’t have $5000, but because I’d rather pay a few dozen dollars more a year to avoid a potential $5000 expense.
Like I said, I would consider the risk that your house will become uninsurable. For many folks this would immediately evict you from your home. If you choose to claim small stuff, I would only do so once every 10 years or so to try to avoid this. Thinking that you can easily game an industry with flotillas of actuaries and years of consistent profits is typically not a winning battle for most but can be for a select few.

Jags4186
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Joined: Wed Jun 18, 2014 7:12 pm

Re: Does anyone offer ultra-high deductible insurance plans?

Post by Jags4186 » Wed Sep 11, 2019 6:36 pm

megabad wrote:
Wed Sep 11, 2019 5:42 pm
Jags4186 wrote:
Wed Sep 11, 2019 3:47 pm

Like I said, I carry a $1000 deductible. If I had a $1200 problem I wouldn’t file a claim. If I had a $5000 problem I would. Not because I don’t have $5000, but because I’d rather pay a few dozen dollars more a year to avoid a potential $5000 expense.
Like I said, I would consider the risk that your house will become uninsurable. For many folks this would immediately evict you from your home. If you choose to claim small stuff, I would only do so once every 10 years or so to try to avoid this. Thinking that you can easily game an industry with flotillas of actuaries and years of consistent profits is typically not a winning battle for most but can be for a select few.
I’m not trying to game anything. I don’t consider $5000 to be something “small”. That could be a tree through your roof. I think people are too concerned about this.

People carry collision insurance on their cars and never file a claim if they are hit. Why bother carrying it? I’ve filed several claims in my days. I’ve only been dropped once and that was after I sued my insurer, Progressive, for trying to avoid paying a rightful claim. I won, got my money, got dropped, and then found a new insurer same day for a lesser premium and same coverage that I was paying prior.

talzara
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by talzara » Wed Sep 11, 2019 8:32 pm

knightrider wrote:
Wed Sep 11, 2019 9:36 am
I have everything with State Farm ( auto,home and umbrella ) and their highest deductible is only $5k. I was hoping they had something like $20k or even higher. I wonder why no one offers that?
Almost every insurance company offers percentage deductibles on homeowners insurance. State Farm's highest deductible is 5% of insured value.

hayhayday
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Re: Does anyone offer ultra-high deductible insurance plans?

Post by hayhayday » Fri Sep 13, 2019 2:29 pm

Some of the high tier insurers(pure,nationwide private etc) have 25k deds with optional waiver of deductible for claims over 50k which seems could be best of both if you never plan to make small\ medium claims

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