What is your home insurance deductible?

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LeftCoastIV
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What is your home insurance deductible?

Post by LeftCoastIV »

We are evaluating a new home insurance policy, and have the option to select a higher deductible, ranging from $2.5K to $5K to $10K, with a corresponding reduction in premiums. As reference, our current deductible is $1K.

My thinking on this is that I likely wouldn't file a claim for anything less than $2.5K anyway, so that's a pretty easy decision. The same could be said for a $5K claim.

What have others decided?

Thanks
adestefan
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Re: What is your home insurance deductible?

Post by adestefan »

I’m also currently at $1000. I’ll probably reassess it before my next renewal in 2023. It was set that way when I bought my first house 15 years ago. I would check if A higher deductible would make a difference every few years and it never did. With the way insurance rates are raising I’m not sure if that still true.
rjbraun
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Re: What is your home insurance deductible?

Post by rjbraun »

$5000 deductible. When I looked at a higher deductible the premium reduction didn't seem worth it. I guess the premium was unattractive with a $2500 deductible. Also, I probably figured I would hesitate to file a claim for anything between $2500 and $5000.
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ResearchMed
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Re: What is your home insurance deductible?

Post by ResearchMed »

rjbraun wrote: Tue Aug 09, 2022 8:47 pm $5000 deductible. When I looked at a higher deductible the premium reduction didn't seem worth it. I guess the premium was unattractive with a $2500 deductible. Also, I probably figured I would hesitate to file a claim for anything between $2500 and $5000.

One problem we realized when we decided to up the deductible is that *whatever* the deductible, there's still the decision of "how much above the deductible" would it need to be to file a claim.

I mean, with $5k, if the loss is $5,100, as a silly example, it's not worth making a claim and possibly affecting the claims history, etc. But $6k? $6,100? $6,500? $7k? What's the cutoff, and that's an issue no matter what the deductible.
That seems to be sort of an odd situation, but that *is* the situation any time there is a decision. Something like $20k, well, sure.
So why not up the deductible to $10k? Same problems... just starting at a higher threshold.
:annoyed

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riverant
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Re: What is your home insurance deductible?

Post by riverant »

I find the premium savings isn’t really worth it to go above 2500. Thinking about it, claims for a given policy are really rare, excluding some weather claims in parts of the country. And if you’re already at a 2500 deductible, claims tend to be large (say over 5000). So while a higher deductible means severity is lower for the company, we’re talking a very low probability of them saving $2500. So you might get a $50 lower premium. While I can afford a 5k claim, it’ll annoy me a heck of a lot more than the value is place on saving $50 a year.
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Re: What is your home insurance deductible?

Post by runner3081 »

$10K.
feh
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Re: What is your home insurance deductible?

Post by feh »

State laws come into play here. In my last state of residence, the max deductible was 1% of the home's value, which is what I set the policy to.
Mako
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Re: What is your home insurance deductible?

Post by Mako »

feh wrote: Wed Aug 10, 2022 7:08 am State laws come into play here. In my last state of residence, the max deductible was 1% of the home's value, which is what I set the policy to.
Also Fannie Mae allows a max of 5% of the face amount, so if you have a mortgage you likely have that limit. One should check their mortgage docs.

OP I did the same thing a year ago, moved from $1000 to $2500 following a short thread here. Didn't use insurance in the past year and sold the house, so I guess I won.

viewtopic.php?p=6152448
Nowizard
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Re: What is your home insurance deductible?

Post by Nowizard »

Ours is a percentage of the loss, not even sure whether it is 2 or 5% which reflects the choice of premium cost over concern for loss.

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goingup
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Re: What is your home insurance deductible?

Post by goingup »

$5K. USAA on CA home. I will think about raising to $10K on renewal. Never had a claim in 26 years.
michaeljc70
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Re: What is your home insurance deductible?

Post by michaeljc70 »

$1000. That is the maximum per our HOA.
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Re: What is your home insurance deductible?

Post by mw1739 »

$2500. It's been awhile since I had our agent check, but last I checked the premium savings didn't seem worth it to go beyond $2500 or $5000.
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LeftCoastIV
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Re: What is your home insurance deductible?

Post by LeftCoastIV »

Thanks all. In looking at the policy quotes, the biggest savings for us comes from moving from $2.5K to $5K deductible, which lowers the annual premium by $755. Moving to $10K only lowers by another $355.
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Re: What is your home insurance deductible?

Post by CAsage »

I've never had a claim, basically I view HO insurance for total loss due to fire. I chose 10K because it lowered the "lost" premium, which over 30 years (and counting) will more than cover... Catastrophic loss only.
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turtlebug
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Re: What is your home insurance deductible?

Post by turtlebug »

10K deductible with USAA. If allowed, I'd increase it to 15K.
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Re: What is your home insurance deductible?

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Outer Marker
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Re: What is your home insurance deductible?

Post by Outer Marker »

$25,000. I plan never to file a claim unless the house burns down. I can afford to absorb a $25,000 loss (albeit painful) and don't believe in insuring anything I can afford to self-insure. It's a losers bet that always favors "the house." i.e. insurance company. You'll have smaller premiums, not have to hassle with third party reimbursement if you do have a loss, and your rates won't increase from making small claims (which are the whole point of having a low deductible).
discman017
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Re: What is your home insurance deductible?

Post by discman017 »

Outer Marker wrote: Wed Aug 10, 2022 10:33 am $25,000. I plan never to file a claim unless the house burns down. I can afford to absorb a $25,000 loss (albeit painful) and don't believe in insuring anything I can afford to self-insure. It's a losers bet that always favors "the house." i.e. insurance company. You'll have smaller premiums, not have to hassle with third party reimbursement if you do have a loss, and your rates won't increase from making small claims (which are the whole point of having a low deductible).
Well said. Max deductible with my current insurer is 2%. IIRC, going from the minimum $1K deductible to the 2% dropped my premium by about half.

I previously had a $50K deductible with Chubb. They have a unique policy where the deductible is waived on claims over $50K. So essentially, I couldn't claim any loss under $50K, but any loss over $50K was covered from the first dollar, with no deductible.

I buy homeowner's insurance to cover a catastrophic loss that would be financially devastating (i.e. total loss due to wildfire). For smaller issues that come up, I'll fix myself or pay out of pocket. Had a dishwasher leak a few years ago, for example, and might have paid $10K or more to have everything professionally fixed (flooring, drywall, etc.) but just did the work myself, paying $100 or so for materials.

It especially doesn't make sense to me when people have a $1K deductible and are reluctant to make a $5K claim because they're afraid it will raise their premium. If you're not even going to make a $5K claim, why pay extra for the low deductible?
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Re: What is your home insurance deductible?

Post by Outer Marker »

LeftCoastIV wrote: Wed Aug 10, 2022 9:51 am Thanks all. In looking at the policy quotes, the biggest savings for us comes from moving from $2.5K to $5K deductible, which lowers the annual premium by $755. Moving to $10K only lowers by another $355.
So, over 10 years, that $355 plus interest equals approximately $5,000 - or the entire amount of the lower deductible, which will then be in the insurance company's pocket, not yours. In 30+ years of home ownership, I have yet to file a home insurance claim. It adds up . . .
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Re: What is your home insurance deductible?

Post by Broken Man 1999 »

Our deductible for everything except hurricane is $5,000. Hurricane deductible is $6,820.

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Re: What is your home insurance deductible?

Post by Tom_T »

Happy this topic came along. I checked my coverage, and my deductible is $1,000. I called the insurance company, and they can go up to $2,500 max for a deductible. That will save me $260/year, so I went ahead with the change. Better than nothing. And, since my policy renewed four months ago, they will send a check for the prorated difference.
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Re: What is your home insurance deductible?

Post by an_asker »

ResearchMed wrote: Tue Aug 09, 2022 9:37 pm [...]
One problem we realized when we decided to up the deductible is that *whatever* the deductible, there's still the decision of "how much above the deductible" would it need to be to file a claim.

I mean, with $5k, if the loss is $5,100, as a silly example, it's not worth making a claim and possibly affecting the claims history, etc. But $6k? $6,100? $6,500? $7k? What's the cutoff, and that's an issue no matter what the deductible.
That seems to be sort of an odd situation, but that *is* the situation any time there is a decision. Something like $20k, well, sure.
So why not up the deductible to $10k? Same problems... just starting at a higher threshold.
:annoyed

RM
Here is where the issue comes in. Let's say you have an issue and the estimate to fix it is $6,000. You start with the repairs and then find embedded issue #1.1 which is an additional $6,000 to fix.

I don't know how the insurance will react if you tell them that this is a $12,000 issue ... and that you are already $6,000 in the hole which was not inspected and approved by their adjuster.

That really is the risk you would be really taking.
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Re: What is your home insurance deductible?

Post by BolderBoy »

discman017 wrote: Wed Aug 10, 2022 10:37 am.
I previously had a $50K deductible with Chubb. They have a unique policy where the deductible is waived on claims over $50K. So essentially, I couldn't claim any loss under $50K, but any loss over $50K was covered from the first dollar, with no deductible.

I buy homeowner's insurance to cover a catastrophic loss that would be financially devastating (i.e. total loss due to wildfire). For smaller issues that come up, I'll fix myself or pay out of pocket.
I presently have Chubb and the $50k deductible. And I agree with your other sentiments as well. Nothing to do with premium cost reduction.
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SubPar
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Re: What is your home insurance deductible?

Post by SubPar »

$2,500 if memory serves me. I have a guaranteed replacement cost policy.
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Re: What is your home insurance deductible?

Post by chipperd »

$2,500 with high level replacement cost.

Note: we reduced our cost of insurance by stepping down to the lowest level, the portion of the insurance that covers the contents of our home.
It seems the insurance company thought we were housing a couple Van Goughs.
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Re: What is your home insurance deductible?

Post by N.Y.Cab »

Seems to recall not much savings beyond $1k deductible. This might be different in other area of the country so would reconsider when moving down to Florida.
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quantAndHold
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Re: What is your home insurance deductible?

Post by quantAndHold »

I think it’s 1% of replacement cost on the house, and $1000 on the contents. The higher deductible saved us quite a bit. It was a few years ago, though, so I don’t remember exactly how much.
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Re: What is your home insurance deductible?

Post by glashutte »

$500/ with USAA on 1M home.
It came in handy when things like roof or costly items have to be replaced. I don't want to be 'afraid' to make a claim if it costs $5k or 1%..
My car deductible is $100/claim which has came in handy several times

I think the premium difference was maybe $100/month? I don't recall exactly, so I do not have the exact numbers to compare pros vs cons.
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Re: What is your home insurance deductible?

Post by rjbraun »

ResearchMed wrote: Tue Aug 09, 2022 9:37 pm
rjbraun wrote: Tue Aug 09, 2022 8:47 pm $5000 deductible. When I looked at a higher deductible the premium reduction didn't seem worth it. I guess the premium was unattractive with a $2500 deductible. Also, I probably figured I would hesitate to file a claim for anything between $2500 and $5000.

One problem we realized when we decided to up the deductible is that *whatever* the deductible, there's still the decision of "how much above the deductible" would it need to be to file a claim.

I mean, with $5k, if the loss is $5,100, as a silly example, it's not worth making a claim and possibly affecting the claims history, etc. But $6k? $6,100? $6,500? $7k? What's the cutoff, and that's an issue no matter what the deductible.
That seems to be sort of an odd situation, but that *is* the situation any time there is a decision. Something like $20k, well, sure.
So why not up the deductible to $10k? Same problems... just starting at a higher threshold.
:annoyed

RM
Fair point. While I don't recall the premiums, I guess the savings for deductibles of $7500 or even $10,000 (if I checked) didn't seem attractive enough to me to switch. So, in other words I wanted to have the option to file a claim for over $5000. It doesn't mean that I necessarily would, but I wasn't willing to forego that possibility just to save the premium differential, if you follow.

I've never filed a claim, though I feel as if I have paid Chubb plenty over the years. I know, one should be happy their home didn't burn down. It just stings to receive non-trivial premium hikes each year. Admittedly, I did get a reduction one year, but that feels like ancient history now.

I just keep reminding myself that the policy is intended to make the prospect of being displaced (homeless) a bit more bearable by, I hope, not having to deal with "nickel and diming" on claims. Untested, so far, but hoping that Chubb will live up to my perception / understanding of their reputation.
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Re: What is your home insurance deductible?

Post by MikeG62 »

LeftCoastIV wrote: Tue Aug 09, 2022 8:35 pm We are evaluating a new home insurance policy, and have the option to select a higher deductible, ranging from $2.5K to $5K to $10K, with a corresponding reduction in premiums. As reference, our current deductible is $1K.

My thinking on this is that I likely wouldn't file a claim for anything less than $2.5K anyway, so that's a pretty easy decision. The same could be said for a $5K claim.

What have others decided?

Thanks
Here is how premiums change for increasing the deductible on our homeowners insurance policy.

Deductible levels offered range from $500 to $10,000. The premium reduction for increasing the deductible would be as follows:

$500 to $1,000 = -$160 (I am at $1,000 currently)
$1,000 to $1,500 = -$90
$1,500 to $2,000 = -$65
$2,000 to $2,500 = -$60
$2,500 to $5,000 = -$130 (or $26 for each $500 increment)
$5,000 to $10,000 = -$140 (or $14 for each $500 increment)

The benefit from each successive $500 increase gets smaller and smaller.

We are currently at $1,000, but had an issue recently where we spent $1,500 to repair damage from a broken pipe in our basement. We ate the costs as I decided going through insurance for a claim at this level was not worth it.

Documented the thought process in this thread.

viewtopic.php?t=376543&hilit=homeowners

I should probably increase it to $2,500, but the savings is so small ($215) I haven't gotten around to it. On the one hand, we should not have it at $1,000 (as I know I am not going to submit a claim for $1,500 or even $2,000). On the other, if we had a large claim (say $5,000 or more) where we would file, having the costs covered beginning at $1,001 has some appeal.
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Re: What is your home insurance deductible?

Post by NYCaviator »

$5,000 here. The jump from $2,500 to $5,000 was several hundred dollars savings, but the savings above that were nominal at best. One of our policies has the deductible waiver over a $50k loss.

I, personally, would not make a claim under $10k. I see homeowners insurance as catastrophe insurance, which is why you should have a good emergency fund. I have never understood why people get add ons like refrigerator contents and mechanical breakdown. Every claim you make is going to ding you in the long run with not only higher rates, but possibly fewer insurers willing to work with you.
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Re: What is your home insurance deductible?

Post by Living Free »

glashutte wrote: Wed Aug 10, 2022 4:27 pm $500/ with USAA on 1M home.
It came in handy when things like roof or costly items have to be replaced. I don't want to be 'afraid' to make a claim if it costs $5k or 1%..
My car deductible is $100/claim which has came in handy several times

I think the premium difference was maybe $100/month? I don't recall exactly, so I do not have the exact numbers to compare pros vs cons.
Are you worried that making so many claims might lead to the insurance companies deciding you aren’t worth the risk? From what I understand the insurance companies have something called maybe a clue report and if one has too many claims they’ll decline to offer a policy and /or make it prohibitively expensive
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Re: What is your home insurance deductible?

Post by Metsfan91 »

$1,000.00. I am in the rust belt.
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Re: What is your home insurance deductible?

Post by glashutte »

Living Free wrote: Thu Aug 11, 2022 8:48 pm
glashutte wrote: Wed Aug 10, 2022 4:27 pm $500/ with USAA on 1M home.
It came in handy when things like roof or costly items have to be replaced. I don't want to be 'afraid' to make a claim if it costs $5k or 1%..
My car deductible is $100/claim which has came in handy several times

I think the premium difference was maybe $100/month? I don't recall exactly, so I do not have the exact numbers to compare pros vs cons.
Are you worried that making so many claims might lead to the insurance companies deciding you aren’t worth the risk? From what I understand the insurance companies have something called maybe a clue report and if one has too many claims they’ll decline to offer a policy and /or make it prohibitively expensive
It crossed my mind but I don’t know for certain if different insurances share a database to know who files claims. I wouldn’t be surprised if they do though…
However I’m more afraid of having to pay 1% to fix something ‘big’. I’m my case 1% may be $10,000 so I rather pay a higher premium
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Re: What is your home insurance deductible?

Post by Ron Ronnerson »

It’s $5k.
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Re: What is your home insurance deductible?

Post by av8r316 »

I’ve thought about this over the years and concluded that what I really want is a minimum claim instead of a deductible.

I’m not going to make a small claim, but if I do make a claim, I don’t want to pay anything. In other words, I take care of 100% of the small stuff and you take care of 100% of the big stuff.

I wasn't aware of the Chubb deductible waiver at $50K so thank you for that information.
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Re: What is your home insurance deductible?

Post by JAZZISCOOL »

glashutte wrote: Fri Aug 12, 2022 9:55 am
Living Free wrote: Thu Aug 11, 2022 8:48 pm
glashutte wrote: Wed Aug 10, 2022 4:27 pm $500/ with USAA on 1M home.
It came in handy when things like roof or costly items have to be replaced. I don't want to be 'afraid' to make a claim if it costs $5k or 1%..
My car deductible is $100/claim which has came in handy several times

I think the premium difference was maybe $100/month? I don't recall exactly, so I do not have the exact numbers to compare pros vs cons.
Are you worried that making so many claims might lead to the insurance companies deciding you aren’t worth the risk? From what I understand the insurance companies have something called maybe a clue report and if one has too many claims they’ll decline to offer a policy and /or make it prohibitively expensive
It crossed my mind but I don’t know for certain if different insurances share a database to know who files claims. I wouldn’t be surprised if they do though…
However I’m more afraid of having to pay 1% to fix something ‘big’. I’m my case 1% may be $10,000 so I rather pay a higher premium
I believe this database shows most claims (home, auto).

https://risk.lexisnexis.com/products/clue-auto

https://risk.lexisnexis.com/products/clue-property
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Re: What is your home insurance deductible?

Post by glashutte »

JAZZISCOOL wrote: Fri Aug 12, 2022 10:13 am
glashutte wrote: Fri Aug 12, 2022 9:55 am
Living Free wrote: Thu Aug 11, 2022 8:48 pm
glashutte wrote: Wed Aug 10, 2022 4:27 pm $500/ with USAA on 1M home.
It came in handy when things like roof or costly items have to be replaced. I don't want to be 'afraid' to make a claim if it costs $5k or 1%..
My car deductible is $100/claim which has came in handy several times

I think the premium difference was maybe $100/month? I don't recall exactly, so I do not have the exact numbers to compare pros vs cons.
Are you worried that making so many claims might lead to the insurance companies deciding you aren’t worth the risk? From what I understand the insurance companies have something called maybe a clue report and if one has too many claims they’ll decline to offer a policy and /or make it prohibitively expensive
It crossed my mind but I don’t know for certain if different insurances share a database to know who files claims. I wouldn’t be surprised if they do though…
However I’m more afraid of having to pay 1% to fix something ‘big’. I’m my case 1% may be $10,000 so I rather pay a higher premium
I believe this database shows most claims (home, auto).

https://risk.lexisnexis.com/products/clue-auto

https://risk.lexisnexis.com/products/clue-property
Very helpful and good to know, thanks.
Are their ways to work with this? Such as for married couple, having their home under husband's name only. Then if making too many claims, transfer home ownership to wife's name only and exclude husbands name?
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Re: What is your home insurance deductible?

Post by snackdog »

$45k. WIth current insurance as horrible as it is, we use it mainly for catastrophic coverage like a fire burning the whole place down. Our annual premium would more than double at the lowest deductibles.
Last edited by snackdog on Fri Aug 12, 2022 3:00 pm, edited 1 time in total.
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Re: What is your home insurance deductible?

Post by Fat Lip »

$10k currently and I might go higher on next renewal. I'm not a "claimer" in general, so higher deductibles work out for me over the long term. In contrast I worked with a guy that seemed to suffer an endless series of calamities with his house and he was on to his agent every other week. He got value out of the lowest deductible possible.
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Re: What is your home insurance deductible?

Post by UNCHEEL »

Generally speaking, go as high as you can afford to lose. Insurance is a product and the insurance company would sell you as much as you'll buy, since they stand to make a profit. Likewise, the "expected value" of increasing you deductible to $2,500 or $10,000, etc should leave money in your pocket. Of course, the reduced premium isn't all "savings," since your loss potential goes up., and you could have the bad luck to come out behind (in the event you have a significant claim. But, the odds are with you - and, again, you're betting what you can afford to lose.
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Re: What is your home insurance deductible?

Post by JAZZISCOOL »

glashutte wrote: Fri Aug 12, 2022 1:12 pm
JAZZISCOOL wrote: Fri Aug 12, 2022 10:13 am
glashutte wrote: Fri Aug 12, 2022 9:55 am
Living Free wrote: Thu Aug 11, 2022 8:48 pm
glashutte wrote: Wed Aug 10, 2022 4:27 pm $500/ with USAA on 1M home.
It came in handy when things like roof or costly items have to be replaced. I don't want to be 'afraid' to make a claim if it costs $5k or 1%..
My car deductible is $100/claim which has came in handy several times

I think the premium difference was maybe $100/month? I don't recall exactly, so I do not have the exact numbers to compare pros vs cons.
Are you worried that making so many claims might lead to the insurance companies deciding you aren’t worth the risk? From what I understand the insurance companies have something called maybe a clue report and if one has too many claims they’ll decline to offer a policy and /or make it prohibitively expensive
It crossed my mind but I don’t know for certain if different insurances share a database to know who files claims. I wouldn’t be surprised if they do though…
However I’m more afraid of having to pay 1% to fix something ‘big’. I’m my case 1% may be $10,000 so I rather pay a higher premium
I believe this database shows most claims (home, auto).

https://risk.lexisnexis.com/products/clue-auto

https://risk.lexisnexis.com/products/clue-property
Very helpful and good to know, thanks.
Are their ways to work with this? Such as for married couple, having their home under husband's name only. Then if making too many claims, transfer home ownership to wife's name only and exclude husbands name?
I can't answer all of your questions. I was able to pull a LexisNexis Consumer report (some BH's have referred to this as a "CLUE" report in the past, I believe) a year ago. I assume it uses the above databases. It gives one a lot of information about their financial past including insurance coverage, etc.. It is through LexisNexis Risk Solutions.

https://consumer.risk.lexisnexis.com/consumer

Maybe others can chime in.
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