DISQUS

Dus10 · 3 years ago

Okay, now that this series has been posted, I want to comment on item 16.

While it is generally good to go with a higher deductible to reap a nice monthly savings, it is not always worthwhile. There certainly is the higher deductible that you need to be aware of (and hopefully saving for), but sometimes the savings is all that significant.

For my auto insurance there are three levels of deductibles: $250, $500, and $1000; I chose the $500 deductible. I saved $45 a month by choosing the $500 deductible over the $250 deductible; this was definitely worth it to me. I called to see how much I would save by switching to the $1000 deductible, and it was a mere $8 per month; that is definitely not worth it to me. So, to save $8 a month, I am in jeopardy of losing an addition $500 until I have done saved the $8 for 62.5 months... no thanks. If I need to save an additional $8 a month that bad, there are plenty of other things I could do, like drop my Internet service to the next slowest speed, pass up two pay-per-view movies, clip more coupons, or do one more mystery shop.

Flexo · 3 years ago

Dus10: You just described my car insurance situation perfectly. The $500 deductible was a significant savings over $250, but the savings of a $1,000 deductible was only a few dollars a year. It didn't make financial sense to save less than $20 a year and take the risk of paying another $500, which, considering the amount of driving I do, would be necessary sooner or later.

As it happened, it's "sooner."

Other people's prices for different deductibles may work out differently... so you have to look at your own situation and shop around, etc.

TJJ · 7 months ago

I agree the highest deductible may not always be the best choice. You have to do a cost risk analysis for your situation. For my calculation, I use a 7 year period. If I need to use the insurance within 7 years, do I come out ahead by getting the higher coverage? Remember when you buy full coverage insurance, you are also getting the best lawyers (your insurance company) to represent you. If you do not have full coverage and the other driver does, you will be fighting the best lawyers (their insurance company) in court.

TJJ · 7 months ago

I disagree with the car assumption. Try to find a used car with less than 12,000 miles on it, great condition, and is 30% less than the new car price. Also, include the time-cost of trying to find that car. For example a 2009 Toyota Corolla can be bought within four hours for $15,350. Using your 30% rule and within 4 hours, I can be pulling up in my drive way with a 2008 Toyota Corolla with less than 12K miles on it, without any mechanical problems, with only very minor cosmetics issues, and it will only cost $9,180.