The Car "Sinsurance" Game

How much should your car insurance deductible be? Most people that I talk with tell me that their deductible is $500.00. I then ask them how many accidents they've had in the last 5 years that was their fault. Most people tell me that they haven't been in any accidents in the last 5 years. Let me give you a new thought about your car insurance. Where did deductibles come from anyway? Deductibles are a way to participate with the insurance company to share in the cost of a claim. This way, everyone benefits with lower premiums and are covered for the enormous cost that could create a financial hardship for you. So it would make sense that if your deductible was higher and you were willing to share more in the possible losses of a claim, then your premiums would be lower. The difference between a $500 deductible and $1000 deductible may surprise you with respect to the premium cost savings. I would encourange you to call your insurance company and inquire what your savings would be if you were to increase your deductible to $1000. I think you will be pleasantly surprised. Oh, by the way, if you are afraid that you "might" have to pay $1000 for an accident (especially if it wasn't your fault) I would submit to you that either you know little about financial planning or you don't have sufficient cash reserves set aside for emergency costs, but that's another post. If you want more information on car insurance or financial planning, go to my site and request a contact. Go to - http://www.ameripriseadvisors.com/james.w.mewborn