Lower Your Auto Rate by Raising Your Deductible
A big portion of your auto premium is related to your Comprehensive and Collision coverage. Keep that in mind, because your policy deductible – the amount of money you would pay out of pocket before your insurance pays to repair or replace your vehicle if it is damaged, totaled, or stolen and not recovered – affects your rate.
If you have chosen a low deductible, raising it can save you a lot of money on your policy premium. For example, raising your Collision deductible from $500 to $1,000 would reduce your Collision premium by about 13%.1 Raising it from $1,000 to $2,500 (if available) would lower it by about 28%.
The same principle applies to your Comprehensive coverage. Raising the deductible from $500 to $1,000 would reduce your premiums up to 20%. Raising it from $1,000 to $2,500 would reduce the premium up to 40%.
Just remember that while you will reduce your premium, selecting a higher deductible means that you would pay more out of pocket if you make a claim for physical damage to your vehicle.
Example
Your auto policy premium is $1,200 and the Collision and Comprehensive portions of the premium are $350 and $400, respectively. You have selected a $500 deductible amount for each coverage. You decide to change both deductibles to $1,000 and save 13% on your Collision coverage and 20% on your Comprehensive coverage. Your total savings would be $125.50.
So instead of paying $1,200 for your coverage, you would pay $1,074.50. Selecting a higher deductible would mean greater savings.
Do These Savings Suit You?
The deductible amounts you choose reflect your individual tolerance of risk and your ability to absorb a sudden, unexpected expense. Your personal circumstance may mean you would rather pay a lower monthly premium but pay more when (and if) you have a claim.
Call a Risk Coach
Call your Electric Insurance Company Risk Coach at 800.342.5342 to see what effect changing your deductible amounts would have on your auto policy premium.
