The Personal - The Impact of Your Deductible on Your Premium

“At a recent dinner party with friends, I was surprised to learn that Rachel and Michael were paying about $30 less a month for their insurance. Why is there such a difference?”

How Much is Your Deductible?

Of all the factors that can increase the amount of your monthly premiums, your deductible is one of the most important.

Most home insurance policies provide for a minimum deductible of $500. In the event of a loss covered by your policy, your insurer subtracts the deductible from the amount of the benefit you receive.

If you can afford it, increase your deductible to $1,000, or even more. Doing so will lower your car or home insurance premium, but make sure you can pay the full deductible in the event of an unfortunate incident.

What Other Factors Can Affect Your Premium?

At first glance, the reasons for different prices may be hard to understand, but it’s worth taking a closer look. In addition to your deductible amount, several other factors can affect your automobile or home insurance premium:

• Is your driving record spotless?
• Was your house built recently or a long time ago?
• Have you made numerous insurance claims?

These and other factors are considered when calculating your automobile or home insurance premium.