There is no “ideal” deductible. Each person should determine what the best deductible for him/her is based on his tolerance for risk, how much cash is available on hand to pay the deductible in the event of a loss/claim and how much differing deductibles affect the premium paid.  Higher deductibles will lead to lower premiums but will also mean that in the event of a loss you will have to pay more out of pocket.

Ask yourself this before choosing a deductible:  If you had a claim today, what is the most money would you be comfortable paying.  If your current deductible is higher or lower than that amount, you may want to consider changing it.  Also consider that property and auto insurance are both designed/intended for larger and/or infrequent losses and premiums are based upon this fact.  The more claims you have, the more costly is your insurance and claims frequency can even affect availability of insurance.  So, both the insurance company AND you should be hoping for very few claims.  Also consider that you PAY your premium EVERY year but you don’t and won’t have a CLAIM and have to pay a deductible every year.  So, the savings of a higher deductible can be multiplied over every year you go without a claim.  This should be the mindset when choosing the right deductible.

With all of this in mind, you should consider the highest deductible you can possibly afford in the event of a claim. This will keep your premiums lower (remember, you pay THEM every year).  The contrasting strategy of choosing a lower deductible assuming you’ll have frequent claims can be faulty:  because frequent claims experience will create its own unique set of problems.

In summary, if you’re like most Americans, you’ll pay your insurance for years before using it.  Therefore, since you pay premiums every year, choose the highest deductible you can afford, and take whatever premium savings the higher deductible offers.  It will not only save you a little money today, but will pay off even more over time when you turn in fewer claims.

Whitaker-Myers Insurance Agency Inc. | 3524 Commerce Parkway, Wooster, OH    44691 | (330) 345-5000

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