Car Insurance, to raise or not to raise a deductible

Insurance
1

My wife and I own 2 vehicles:
2009 Honda CR-V: Blue Book value $3,900
2012 Honda Civic: Blue Book value $5,000

Currently our car insurance deductible is $1,000, but we can raise it to $2,000 and save $125 every 6 months on our car insurance bill.

Can someone help me with the math and explain the pros and cons of this, please? Thank you.

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2

Are we talking collision insurance?

The $2,000 deductible would save you $250/year.

Can you afford to replace one of the cars right now? Not a new car but a replacement vehicle.

How much would you save if you dropped the collision coverage on both vehicles?

Consider dropping the collision on the older vehicle and increase the deductible on the other vehicle.

3 Likes
3

Depends on your willingness to file a claim vs willingness to accept $9,000 in total losses

Also make sure you are using retail value for KBB not PP resale or trade-in

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4

You are paying $250 a year to save an expenditure of $2,000 dollars. You need to look at your history of your having an incident which would trigger that cost.

Based on that historical record:

  1. If that incident happened more than once every four years, it’s a good deal.
  2. If it happened once every eight years, it’s a break-even deal.
  3. If it didn’t happen, or happened once in more than eight years, it’s a bad deal.

Your insurance company gets the money to build those big skyscrapers with their names on them because they put their money on bet #3… :slightly_smiling_face:

1 Like
5

makes sense, thanks for the reply!