Mar 25 2008

Saving on car insurance: Our deductible


Our car insurance is up for renewal once again, and we’re shopping for quotes. Before I start looking at other companies, I’m tweaking the numbers with our current company (Geico) to make sure we’re not over-insured in some areas and under-insured in others. I’ll probably do several posts, focusing on one aspect at a time.

If we renewed the exact same policy, it would cost $400.70 for six months for the one car on our policy.

Here’s what we can expect if we change the deductibles.

Deductible $250 $500 $1,000
Comprehensive $31.10 $24.90 $20.70
Collision $219.80 $151.10 $137.40

Right now, we have $500 deductibles for each, and I think that’s where we’re going to stay. Increasing the deductible to $1,000 would save us $4.20 on comprehensive, and $13.70 on collision, for a total of $17.90 off our six-month premium. I’d rather spend that $17.90 and only have a $500 deductible, rather than save a few bucks with the possibility of paying $500 more when filing a claim. Our emergency fund isn’t beefy enough at this point to make me comfortable with a $1k deductible, especially when the savings are minimal.

We’re comfortable with a $500 deductible. Choosing this option saves us $6.20 on comprehensive and $68.70 on collision, for a total savings of $74.90 for a six-month policy. If we had to file a claim on a $250 deductible, that would be like paying $318.70 out of pocket ($250 + 68.70 premium). So, if we end up having to file a claim, the $250 deductible would be about $182 cheaper than it would be if we had a $500 deductible ($500 – $318).

Still, that’s a savings realized only if we file a claim. We don’t drive much, and that $500 deductible is a risk we’re comfortable taking (and paying) if we need to.

Note: I haven’t had much experience with car insurance. I haven’t had my own policy for long, so I’m still somewhat new to this whole process. I’m sharing these posts to give you an idea on what we’re considering with regard to car insurance. When changing your own policy, be sure to use your own numbers and take your own situation into consideration.

Hey! I'm Kacie, wife and mother of 3. I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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