Recent Divine Discussions

Tuesday, January 22, 2008

Deal or No Deal

I finally called my car insurance company today to inquire about increasing my deductible. I was given two scenarios:

  • 1. Increasing the deductible on collision from $500 to $1000.

  • or

  • 2. Increasing the deductibles on both collision and comprehensive from $500 to $1000.

Here are the results:

Option 1: Total savings of $60 over 6 month premium. Comes out to $10 a month.

Option 2
: Total savings of $70 o
ver 6 month premium. Comes out to $11.67 a month.

Ugh! I am just not feeling those numbers.

Increasing the deductible wouldn't pay itself off for 4+ years (when the savings equals the extra $500 in deductible I will be liable to pay out if I ever get into a fender bender).

What do you guys think? Would you go for it?


unequivocal said...

I would save an additional $500 in my emergency fund before I change the deductible on the insurance. This way you will know that you have the money to pay the deductible if you get into any car trouble.

LLuv said...

I totally agree that it is not worth it to increase your deductibles in order to save $10-15 per month. Another thing people don't think about is that at some point you could be 'grandfathered' in at that low deductible. I am currently locked in at a low deductible on my house and if I were to ever switch to a % based deductible I could never switch back to my low flat amount deductible. Plus being in a fender bender is stressful enough - don't need to add the stress of alloting another $500 to the mix!! ;o) Have a great one!!

Single Ma said...

If you have enough in your emergency fund to cover the deductible, I think it's worth it. In MY opinion, EVERY little savings is important because multiple savings of $10-15 in various ways add up to hundreds. So in essence, what you're doing is insuring your own deductible with your emergency fund. The last time I checked, a car accident was an emergency. So why GIVE extra profit to the insurance company when you too can prepare for the "potential" emergency.

Per the comment above, allotting another $500 to a fender bender shouldn't be stressful if you're prepared for it (i.e. the purpose of an e-fund).

Dimples said...

@ everyone

Thanks for the detailed advice. I am going to look into lowering some of my other expenses and then make a decision from there. I'll let you guys know what I decide.