Many people are increasing their auto insurance deductibles in order to have more affordable auto insurance premiums. By doubling your insurance deductibles, you can save up to 40% on the price of your premiums.
However, it is only a good idea if you have the money to pay the deductible in the event of an accident at fault. If you cannot easily access this money, you may not be able to pay your portion of the repair bills and your car may not be repaired in a timely manner. Worse still, you may be forced to pay part of the damage to someone else's property and may not be able to do so. Many people without large cash reserves have to keep their deductibles low. To do this, however, they often have to pay higher premiums.
Is there a way to reduce your deductible and keep your premiums manageable?There are several ways to achieve this goal. Each method requires some planning and discipline, but each can be done by anyone looking for a low deductible and premium.
First of all, you can choose to take out insurance with a company that offers a "declining franchise" program. Under these programs, your deductible decreases by a fixed amount each year if you are accident-free and claim-free. Some of these programs allow you to reduce all your deductibles, and some only allow you to reduce your collision or liability deductible. Different companies offer different amounts for the deduction and at different rates. You can compare programs to find one that is right for you.
Another option is to create a plan in which you gradually record your deductible amount while slowly increasing your deductible every six months. Here's how it would work: Suppose your current deductible is $ 250, the lowest allowed by your business. Now suppose you save $ 100 per renewal period by increasing your deductible to $ 500. If you do and save the money you saved on your premiums, plus your initial $ 250, you would have $ 450 in one year, almost enough to pay your new deductible. You can continue to save money to gradually increase your deductible to $ 750 and then to $ 1,000. You can even choose to increase your deductible more than that if your business allows it. As you slowly increase your deductible, your premiums decrease, saving you the money you will need to pay the new higher deductible.
You can also find a company that offers "accident remission". With the remission of an accident, you can be "forgiven" for your first accident with no deductible if the accident does not exceed a certain dollar amount in the total cost. This is very useful for saving your deductible funds if you have a minor fender. You can also save money and pay the damage yourself if the accident is very minor; that way, by not making a claim, you keep your premiums lower and you don't have an unexpected increase in the price of your auto insurance.
You can also reduce your deductible by requesting a deductible reduction from your insurance company, which may be offset by other reductions for which you may be eligible. If you are not currently receiving all of the possible discounts, you may be missing the savings that could pay a lower deductible.
Be sure to consider all of the separate deductibles that apply to your policy as a whole. If you have full coverage, which includes liability, full insurance and collision, you probably have separate deductibles for each policy. Plus, you probably have a deductible for things like uninsured motorist coverage. Some states set the deductible for coverage of motorists not insured by law; you cannot increase this deductible even if you wish. However, most states allow you to pay with the deductibles on your collision and your full policies, increasing or decreasing them as you see fit.
