Higher Deductible Philosophy

Adopting an overall higher deductible philosophy can save you tons of money over the years.  Spell that $M$O$N$E$Y$ in your pocket!  Let me show you how it works.

Yesterday a client of mine called me to tell me about a water loss he’d had over the weekend.  We’ll call him, Henry.  Henry went on to explain how the ice maker line went out in the middle of the night and he woke up to that dreaded SLOSH, SLOSH as he walked through his kitchen.

Henry is a pretty handy guy so he sopped up all the water, pulled up the carpeting, cut out some drywall and had fans going when he called me.  “So what’s my deductible, Dennis?  I know it’s up there.”

“Looks like five grand, Henry”

“Ouch”, he said.

We went on to review his Higher Deductible Philosophy. I reviewed the numbers for him.  In addition to his house, Henry has 3 cars, a motorcycle, a boat and a motorhome insured with me.  His smallest deductible on anything is $1000.   He raised them about 10 years ago from the typical $250 or $500 deductible philosophy with which most people are comfortable.  I did some quick calculations for him.

On all of his policies, Henry saves about $780 a year with a Higher Deductible Philosophy.

I mentioned that he’s been in this kind of profile for over 10 years.  He’s put over $7800 in his pocket in premium savings.

This little water loss is going to cost him about $2000 by the time his kitchen is put back together.  It’s only the second claim he’s had in 10 years.  The first one was $400 windshield he had to pay for completely because his deductible at that time on the car was $1000.

He’s STILL over $5000 ahead.

Call your agent today and see what your savings could be by raising deductibles on all your policies.


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