Factor number seven is one of the easiest ways for you to lower your monthly premiums - adjusting your claims deductible. Your deductible is how much you must pay out of pocket per incident before the insurance company will start making payments. For example, if you have a $1,000 deductible on your jewelry rider, the insurance company will pay out the amount of a claim minus that $1,000 amount. The higher the deductible, the less risk the insurance company is taking (since you won’t make any claims under $1,000) and so they are rewarding you, the policy holder, by reducing your premiums. In essence, you are being paid to assume that additional risk.
So, when you get quotes, adjust the deductible and see how it affects your monthly premiums. Sometimes it is worth it to adjust that deductible and sometimes it isn’t.
This article is part of a series of ten that discuss the ten factors that affect insurance premiums.
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