How Deciding to Raise Your Deductible Can Help You Save 20% or More on Your Homeowners Insurance By Anthony Peck At Isnare.com Ezine Articles

Did you know that deciding to raise your deductible can help you save 20% or more on your homeowners insurance? Sure, most people know that a higher deductible equals lower premiums. That's part of the standard spiel handed down when you're talking about saving money on homeowners insurance-or any kind of insurance, for that matter. What most people don't know is why it works, when it works or how high they need to go to maximize their savings.

1) Why a Higher Deductible Can Save You 20% or More on Your Homeowners Insurance

Have you ever met an insurance company that offered to pay your claims for nothing? Of course not. Insurance providers might be in the business of rescuing you after your home's been damaged or destroyed, but they're also in the business of making money-and giving away something for nothing's bad business.

When you raise your deductibles you're volunteering to pay more every time you have to file a homeowners insurance claim. When you're paying more they're paying less, and every insurance provider in the country is going to reward that fact by offering to save you money on your homeowners insurance.

2) When It Works

Lower premiums should go into effect the minute you raise your deductible; however, whether that point will come in the middle of a policy period or when you renew your policy is going to be up to your homeowners insurance provider. Every company has their own policy when it comes to making changes to their policies (try saying that five times fast!), so it's important to talk to yours when you've made the decision to raise your deductibles.

3) How High Should You Go?

Ah, the $10,000,000 question-how high should you raise your deductible? There are a number of things to consider when deciding where you want to set your deductibles, and the decision should be made based solely on your own economic circumstances. Keep in mind that while raising your deductibles as high as they'll let you go in exchange for a lower premium sounds like a good idea at the time, when you have to file a homeowners insurance policy you're going to be expected to come up with that amount out of pocket.

That said, here's what studies are showing regarding the impact deciding to raise your deductible can have on your premiums:

a) The average deductible is $250-300 per claim filed.
b) Raising your deductible to $500 can save you up to 12% on your annual premiums.
c) Deciding to raise your deductible to $1,000 (which is the level most leading insurance experts recommend to homeowners) can save you 24%.
d) Raising your deductible to $2,500 can shave 30% off of your premiums, and
e) A $5,000 deductible can save you 37% or more each year.

Deciding to raise your deductible can save you 20% or more on your homeowners insurance, and it can do it fairly quickly. Just make sure you can afford to cut that check before you sign on the dotted line.

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