Home Insurance Deductible?

[mountainsoft]

I just paid our home insurance for the year and was looking over the policy. I noticed the deductible is set at $1000, the default value set when we bought our first home. We didn't have much money back then and that's what the agent recommended, so that's what we went with. I never really gave it much thought.

These days we have a good emergency fund built up, so a low deductible isn't as important. Obviously I would need to talk with my agent to see how much our annual insurance bill would be affected by raising the deductible, but I'm curious what other folks have as their home insurance deductible?

To be honest, it wouldn't even cross my mind to file an insurance claim unless damage was in the thousands of dollars. $1000-$4000 or so and I'd probably just fix it out of pocket. Less hassle and I could get it fixed sooner. We've been insured 32+ years and have never filed a claim for anything.

What deductible do you have on your home insurance?

 

[Midpack]

I was at $1000, increased deductible to $2500. Like you, we've never filed a claim in over 40 years as we've never had a loss or expense that wasn't normal home maintenance.

 

[jazz4cash]

I think ours is $1k also. When I looked into raising it there was not much to gain from the additional exposure. Same with auto coverage. I wanted ~3k on the house. More significantly our coverage for windstorm damage was modified. It has a specific deductible which is a percentage of coverage. It was 1% of coverage IIRC. I think it’s a local thing in my state but probably some others too. We changed insurers, went back to a flat deductible and had a claim this year for wind damage.

 

[Dean56]

Per Clark Howard: I have my deductible set at $1,000. I've only had 1 claim in 30 years, roof replaced due to hail damage. I'm thinking about raising the deductible to $2,500.

 

[mountainsoft]

I was at $1000, increased deductible to $2500. Like you, we've never filed a claim in over 40 years as we've never had a loss or expense that wasn't normal home maintenance.

Did it have much impact on your insurance cost?

Our home insurance payment was $1012 this year, first time we've crossed the $1000 mark. Obviously, if a higher deductible only dropped it to $800 or so I don't know that it would be worth the effort. If it got down to $500-700, then it might be worth considering.

 

[harley]

Every time I looked into raising my deductible, it just wasn't worth it. Negligible cost savings.

 

[MrsHaloFIRE]

I think I may be at 1pct home value. So its true catastrophe insurance. I wouldn't make casual claims anyway

 

[finnski1]

Mine is at Liberty Mutual and is $1000.
I just logged on and checked. They have an instant quote feature where you can edit your policy and see the difference.
I changed mine to a $2500 deductible and it would reduce the annual premium by $68.
For now I'll leave it at the $1000 level.

 

[timbervest]

Mine is $1000. I made a claim in 1994 after the California Northridge Earthquake for repairs to my house and pool that saved me more than all of the premiums that I had paid to date ( or subsequent did pay since then) so I am ahead of the game.

 

[bobandsherry]

So, how much would you save by increasing your deductible? How long to break even? Then ask yourself what your chance is of filing a claim in excess of $1,000 deductible and how many times within that period.

Last I looked it was many years to breakeven and amount saved wasn't worth making the change as savings was inconsequential. But YMMV.

 

[Mark1]

As others have indicated your savings won't increase that much as your deductible is increased. That said, mine is 3% of the house value for a deductible of $17,442.

Just thought I would share so that you know there are a few high deductible policies out there.

 

[Walt34]

When we first bought the house it was (I think) $500 and when there were a couple of sharp premium increases I raised it to $1,500. Going to $2,500 or higher didn't make a lot of difference.

 

[Stormy Kromer]

I've found the point of diminishing returns starts around $1,500.

 

[EastWest Gal]

Every three years or so we sit down with our insurance agent and review all aspects of our insurance: home, auto, umbrella. We tweak changes sometimes. I think we have a $1000 deductible on home and 0% on autos (older cars, no commute, well below our budget needs).

Twice in the past 20 years we had a basement flood from malfunctioning AC. Mostly carpet replacement. In fact, the first time was fantastic, we decided to replace the entire carpet with something nicer and saved quite a bit off of the total cost. We've been with the same company since 1984, so we get discount for being a steady customer.

It's a good idea to review insurance periodically. The agent can make tweaks and can quickly adjust coverage to meet your current needs.

 

[mountainsoft]

Every three years or so we sit down with our insurance agent and review all aspects of our insurance

Yeah, we usually do that too. We were supposed to come in in 2020, but that became a low priority when COVID hit.

 

[Car-Guy]

Our deductible(s) are $1k for "content" and 1% for the "home". After that, everything is insured for replacement cost up to the policy maximums.

 

[jazz4cash]

We are paying 30-40% less than we paid with the company that changed our deductible for wind damage from a flat amount to 1% of coverage. Any way you look at it homeowners coverage is usually a high value product but it still sucks how they jack up tour rates sometimes. That’s when it’s time for a change.
Our auto coverage jumped up because our carrier decided they didn’t like an adult child on our policy. We asked for fresh quotes from several providers and amazingly a few couldn’t even be bothered to reply, including our current broker. We switched to The Hartford AARP Plan and it saved us 30%. Our broker called after the switch to see why we switched. Now they call to wish us Happy New Year! So far they still have our homeowners policy.

 

[kimcdougc]

Policy on home deductible is $1,300. We pay $1300 per year and that is with earthquake insurance whish has a 15% deductible.

 

[GenXguy]

My deductible on my first house was $100, then I increased it to $250, to $500, and it's been $1000 for years now. I asked about increasing it even higher to $1500 as my premiums continued to rise, and I didn't think the small drop in the premium was sufficient. If I needed to make a claim over the next 7 years that hit the higher deductible, it would break even. So I left it at $1000, which looks like the best compromise.

 

[Ole Red 29]

Our deductible is 1% (~$8,000). Like the others said, I wouldn't mess with insurance unless it was a substantial cost. Also, the higher deductible makes a worthy impact on our premiums.

 

[ExFlyBoy5]

We leave ours at $10K until tornado season comes around, then drop it to $5K. The annual difference between 5K and 10K is a couple hundred bucks (USAA). Thankfully, they have made it very easy to adjust the deductible online.

 

[Sunset]

Ours is $1,000
Around 10 yrs ago we had the roof, and things replaced due to a large hail storm, that alone paid us back for around 7-8 yrs of premiums.

I suppose I'm cheap, so when some jerk threw a rock through my tenants window, I frankly hated paying out the $500 to replace the glass.
My rental deductible is $1,000.

 

[ownyourfuture]

I started out at $500.00 when I bought my home in July of 1994.
Annual Premium was $275.00

When the annual premium reached $1,098.00 in 2015
(with zero claims) I upped it to $5,000.00

This dropped the premium to $702.00
Translation: Upped the deductible by 900.00% to lower the premium by -36.07%

By 2020, it was already back up to $932.00

My conclusion: The insurance company always wins

 

[mountainsoft]

Mine is at Liberty Mutual and is $1000.
I just logged on and checked. They have an instant quote feature where you can edit your policy and see the difference. I changed mine to a $2500 deductible and it would reduce the annual premium by $68. For now I'll leave it at the $1000 level.

I tried doing an online quote with State Farm, but for whatever reason the web site said they couldn't complete the quote online. Figures. I did run across another site that listed differences in deductibles for State Farm in my state. It looks like I would only save around $150-200/yr if I increased the deductible to $2500. That's not much savings for higher out of pocket costs, so I'll just leave the deductible at $1000. It's been there for 30+ years, why change now.

 

[finnski1]

I tried doing an online quote with State Farm, but for whatever reason the web site said they couldn't complete the quote online. Figures. I did run across another site that listed differences in deductibles for State Farm in my state. It looks like I would only save around $150-200/yr if I increased the deductible to $2500. That's not much savings for higher out of pocket costs, so I'll just leave the deductible at $1000. It's been there for 30+ years, why change now.

Yeah Liberty Mutual made it easy. Mine only came out to a $68 annual savings. I didn't bother.