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  1. #1
    mamica is offline Silver level (200+ posts)
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    Default Homeowner's insurance - deductible?

    We just increased the deductible on our homeowner's insurance from $1000 to $5000, and I'm having buyer's remorse. We're trying to decrease our premium, and this helps a lot, but I'm wondering if we're being too risky. How much is your homeowner's deductible????

  2. #2
    BillK's Avatar
    BillK is offline Emerald level (3000+ posts)
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    I have a $1000 deductible on mine and I have remorse over it. No way on earth I'd have a $5000 deductible unless I had so much money I didn't know what to do with it all. Everyone's situation is different - I have a couple folks insured with $10000 deductibles - but they have more money than God. If you can easily come up with $5k in the event of a claim then it's fine.
    ~Bill

  3. #3
    niccig is offline Clean Sweep forum moderator
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    Quote Originally Posted by BillK View Post
    If you can easily come up with $5k in the event of a claim then it's fine.
    I read in an article about car insurance that if you increase your deductible, save the difference in premiums until you get the deductible amount. Keep that money in an ING account or something similar as part of your emergency fund. So, if you do need it, it's there.

    ETA In the short term this doesn't save you any money as you're paying the same amount, but it does in the long term. If it takes you 4 years to get the deductible amount, then there's another say 4 years before you make a claim, you've got the deductible money and 4 years of the premium difference as savings. I know we haven't made a claim on either our house or car insurance in over 6 years. But I can see it taking a while to get $5000. Going from $500 to $1000 wouldn't take as long.

    Our home insurance deductible is $500, but it's coupled with our car insurance and that helped to lower it and the car insurance.
    Last edited by niccig; 05-28-2009 at 05:25 PM.

  4. #4
    KrisM is offline Clean Sweep forum moderator
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    Quote Originally Posted by mamica View Post
    We just increased the deductible on our homeowner's insurance from $1000 to $5000, and I'm having buyer's remorse. We're trying to decrease our premium, and this helps a lot, but I'm wondering if we're being too risky. How much is your homeowner's deductible????
    Ours is $1000. How much, %tage wise, did the premium go down with the increase in deductible? Our insurances are up in August and I plan to call around this summer for quotes.
    Kris

    Mom to:
    DS1 4/2004
    DD 6/2006
    DS2 7/2008

  5. #5
    JBaxter's Avatar
    JBaxter is offline Red Diamond level (10,000+ posts)
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    Ours is $500
    Jeana, Momma to 4 fantastic sons

    Everything happens for a reason, sometimes the reason is you're stupid and make bad decisions.
    {My favorite postcard that was posted on facebook}
    On Facebook? We chat there too.

  6. #6
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    We're at $1000 - that made a big enough difference for us vs $500. We can easily cover what we have. Now you have me considering higher. I'm kind of paranoid, since I hear about rates going up or people being dropped for making claims. We're DIY type people and not likely to make a claim on things that maybe other people would.

  7. #7
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    Don't feel remorse, if you can afford the $5,000. Homeowners insurance is really supposed to be for big things, not $500 items since you run a risk of being cancelled or your premiums increased big time. We have USAA (known as a great company) as do my in-laws, and they had one claim after never having a claim in 30+ years and got a big surprise. The claim was for over $1,000 but under $3,000 and they had a big premium increase and threat to cancel. If you can afford the $5,000, keep your premiums and savfe your claims for big ticket things. I'm always surprised at what people think they are going to make claims for (on this board and our local moms' board) when insurance companies are just looking for reasons to increase premiums. Homes are actually rates as well as individuals, meaning tracked, so it also matters how many claims previous residents had as well. Most of the "money" magazines for consumers advise having the highest deductible you can stomach and afford in the event of a catastrophic loss and suggest paying to replace broken windows, etc. out of pocket.

  8. #8
    o_mom is online now Red Diamond level (10,000+ posts)
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    One other thing to check is the terms of your mortgage. Many have limits on the amount of your deductible.
    Mama to three boys ('03, '05, '07)

  9. #9
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    Quote Originally Posted by belovedgandp View Post
    We're at $1000 - that made a big enough difference for us vs $500. We can easily cover what we have. Now you have me considering higher. I'm kind of paranoid, since I hear about rates going up or people being dropped for making claims. We're DIY type people and not likely to make a claim on things that maybe other people would.


    I'm considering higher now, too! I should give my agent a call to see the difference in premium.

    We do have more than that in cash savings, so it wouldn't give me any angst to have the higher deductible.

  10. #10
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    Our deductible is $1,000.

    We have lived in our house for 20 years and we never made a claim until two summers ago when our neighborhood was wiped out by a hailstorm (our house had $40 k in damage). Nine months later (and literally just a few days after our siding was replaced) we had another major hailstorm which resulted in $25k damage. Now this was very unlikely to happen, but I had to make the repairs both times - and I'm grateful it only cost me $2k (for two claims). It would be a hardship for my family to have had a deductible of $5k.

    I think if you are feeling angst in your decision that it is a good indicator you should go back to your lower deductible.

    ETA: Our premiums did not go up in the situation described above.

    Good luck!

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