Deductibles are part of most insurance polices that can vary greatly from very small to quiet large. What size deductible fits you best is something that should be discussed with your insurance agent. In the old days most people carried very low deductibles such as $100 for $250. Some companies no longer even offer the lower deductibles. Now we seldom sell new policies with less than a $1000 deductible.
There are several reasons to consider carrying a larger deductible on the physical damage on your vehicles, home or business property. The first is to get the best buying power for your insurance premium. The best savings percentage versus risk assumed usually comes with a $1000 deductible with most carriers. The additional amount of the deductible at risk if you go a year or two without filing a claim, is usually offset by reduced premium in less than a year. With multiple cars, home or a business with a large property schedule and/or auto's, savings often would allow you to cover several small claims from premium savings obtained. We often suggest to our customers to put the savings in a separate account to self insure the small claims and to have cash available to meet the higher deductibles.
In personal insurance most insurance carriers go by the rules that reminds one of baseball: 3 or more strikes and your out in a three year period. Insurance was not designed to be used as a maintenance policy and small claims are often better paid, if there are no injuries, out of pocket to avoid being penalized by the insurance company for increased premium due to claims.
Insurance companies look at both frequency and severity when calculating what pricing guidelines you qualify for. Often by turning in a small claim you loose more in premium surcharges than you gain by turning in the claim. Also, by turning in multiple small claims in any three year time frame you may severely limit your insurance options and jeopardize your insurability. If an insurance company cancels you for claims frequency, this information is shared in what is known as a clue report that would make it very difficult to obtain insurance coverage anywhere outside of a high risk pool.
At ABI Insurance we work with our customers to try to help them avoid such tragic mistakes and offer our clients more than just a cheap price. We work with each customer offering several choices with options and provide risk management advice so our customers can make a better buying decision. The deductible is certainly one of them that can help our clients find the best value for their insurance premium dollar. Please give one of our agents a call and find out how ABI Insurance Agency can offer you the best value for your insurance dollar.