Should you increase your car and home insurance deductible to save money?

Are you renewing your car or home insurance soon? Increasing your deductible could lower your premium.

A legitimate question: What is a franchise? This is the amount you will pay out of pocket in the event of a disaster.

For example, you need to change your bumper after an accident. It will cost you $2500 (no joke), your deductible is $150. The insurer pays $2,350, you pay $150 upfront. Your water heater leaks while you’re vacationing in the South and you need to replace the basement floor. Cost: $6000. Deductible: $250. The insurer pays $5,750 and you pay the rest.

And if you increase your deductible to $1,000, what happens? Your savings can amount to tens of dollars.

Is that worth it?

Is it worth increasing the deductible? It depends on. A renter paying $300 has less incentive than an owner paying $2,000. A $1,000 deductible for car insurance is high.

If we increase our deductible and disaster strikes, we still need to have the means to pay… While one in three Quebecers live paycheck to paycheck, many would struggle to spend $1,000 a few weeks in advance. This is controversial in the insurance industry.

On the other hand, charging for a $1,200 windshield when the deductible is $1,000 might not be a good idea.

And if you increase your deductible from $500 to $1,000 to save $30 or $50, forget it.

According to your file

Of course, an insurer sets your premium based on various criteria: location, vehicle make, driving experience, gender, age, experience with motor vehicle claims; Age, type of building, proximity to a fire hydrant, location, property or reconstruction values, home disaster experience.

For example, the average car insurance premium in Montreal is about $1,000 and in Quebec it is $773. In Quebec housing it is $956 (including detached houses, condominiums and renters). Owners pay an average of $1,311 and renters pay $347.

Specifically, the more complaints you submit, the higher the costs will be for you at the next extension. Obviously, a car has a higher risk of damage than a home.

It should be noted that there is a high volume of windshield-related claims in motor vehicles (we live in Quebec), but collisions cost insurers the most (more than 300,000 claims per year) compared to thefts (around 10,000 complaints). yearly).

It has long been known that water damage (intrusion from the drains or roof) in homes costs a fortune, more than fire or broken plumbing (leaking pipes or dishwashers).

Advice

  • If you want to extend your insurance, ask the insurer what the premium difference will be if the deductible is higher.
  • For automobiles, non-collision or non-pay collision insurance (which covers fire, theft, liability, but not collision) generally carries a lower deductible than insurance that covers vehicle replacement.
  • We can’t repeat it enough: To get a discount, centralize your car and home insurance with the same insurer, install a GPS tracking system in your vehicle and an alarm system in the house.

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