53 yr old home - West San Jose CA, current home ins deductible- 1000, premium- $365. If deductible is increased to 1500,premium is $320.

Asked by Mini, San Jose, CA Sun Jul 4, 2010

should we increase the deductible? Covers personal prop, dwelling, sep structures, lossof use, personal liability , med payments to others.

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Donald Stevens’ answer
Donald Steve…, Agent, Fontana, CA
Fri May 25, 2012
If the savings remained the same over many years it would take over 10 years of not having a claim for the lower premuim to bring you a savings. A claim in under 10 years will cost you more with the lower premuim.

Savings per year: $45 (if the savings amount and premuim stays the same)
Additional risk: $500 (that's the amount of risk you are taking by increasing your deductible.)

Ten years will save you $450. Even if you make a claim in the 10th year it is still the more expensive option by $50. After the 11th year you will start to save $45 a year.

The decision really depends on how much you can afford to pay and how much you are willing to pay to take that risk.
0 votes
Ruth and Per…, Agent, Los Gatos, CA
Mon Jul 12, 2010
Hi Mini:

Question is personal, but if the stress of buying a house and I understand you also asked a question
about Interest Rate via a separate question, clearly money is tight.

Since this is an annual premium, you may want to go with 1500 deductible and over time get more coverage
after say 6 months to a year.

Good luck.
Perry
Web Reference:  http://www.ruthandperry.com
0 votes
Andrea Wince…, Agent, Milpitas, CA
Sun Jul 4, 2010
That is a personal decision as to whether or not you want to come up with an extra $500 if you have a claim. With my home insurance the most important factors to me are to have enough coverage for personal liability, med payments to others and workers comp - with the lowest possible deductible.
0 votes
Dan Chase, Home Buyer, Texas City, TX
Sun Jul 4, 2010
That is like asking when should I remove collision from a car insurance policy.

The answer is you remove it when you figure the extra cost is not worth the added coverage.

Can you afford that extra $500 when it happens? If not pay extra premiums. If you can maybe increase your deductible. It is a choice to make based on risk, loss, and your ability to cover the difference in costs.

You may decide that increasing your insurance premium to a $250 deduction is the right thing. (maybe decreasing it to a $5,000 deductible) Again, it comes down to extra cost compared to savings balanced against potential losses. The choice is yours.
0 votes
Terri Vellios, Agent, Campbell, CA
Sun Jul 4, 2010
You are wondering if increasing your premium by $45 (is this per month or per year?) The difference is 11 payments so are you banking that you will need to come up with an additional $500? If you were to take the $45 per month and put it aside in a savings account then in 11 payments you will have the additional $500 deductible.

What you should measure is your needs in the the event of a loss and will you be able to cover the deductible? Insurance is necessary for your mortgage, but you are banking on a loss.

Discuss this with your insurance provider.
Web Reference:  http://terrivellios.com
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