One of the best ways to save money on your homeowners insurance is to raise your deductible, but it’s very important that you choose your deductible wisely so that you won’t get stuck paying out money that you don’t have to fix your home in the event of a fire, theft, or major storm. So, how do you go about choosing a deductible that’s right for you? This article will let you know how to choose a deductible that’s right for you.
Home Insurance
Look at Your Savings
Obviously you have to have your deductible amount in savings so that it’s available when you need it, but an assessment of your savings should take into account several factors. First off, you should be able to pay for more than just your homeowners insurance deductible with your savings account. To see how much you need to save to protect your home, think about any major malfunctions that might occur, and plan as if more than one of them would occur simultaneously.
For instance, if you know it would cost you $1,000 to replace or repair a faulty water heater, you should have that in savings. This isn’t to say that you should have enough money to fix everything in your home all at once, but you should be able to pay for not only your insurance deductible but also some other things that your insurance won’t cover.
So, check out your bank accounts to see what you already have in savings and to figure out how much more you could save up within a couple of months. It’s always a good idea to have three to six months worth of living expenses in your savings account, but this will look different for everyone. If you aren’t quite there yet, then set your deductible a little lower for now. You can always raise it later on and watch your homeowners insurance premiums drop as you do.
Look at What You’ll Save
You may think that having a lower homeowners insurance deductible will make your life easier because you won’t have to pay much when something goes wrong in your home. However, when you’re getting a homeowners insurance quote, play with the deductible amounts to see what you can save by paying a higher deductible. Put a few more dollars into your savings account each month, and you’ll soon have the deductible ready to go when you need it.
Home Insurance
Don’t Claim Smaller Amounts
Making claims on your homeowners insurance can really make your premiums rise, so it’s best to pay for expenses under about $1,000 by yourself. Next time there is an attempted break-in at your house resulting in a broken window and a messed-up lock, you should cover the costs instead of claiming them on your insurance. In the long run, you’ll end up saving more money than you spend.