Intro to Insurance
Insurance Deductibles
OK, so it sounds like I should go for the smallest deductible I can get, right? That way the insurance company will pick up a bigger portion of any loss?
Actually, you want to go with the highest deductible you can comfortably afford to pay.
Wait, what?
That may sound crazy, but think of it this way: A deductible is essentially your agreement to pay for part of any loss. The more you’re willing to pay, the less the insurance company has to pay.
What size deductible should you choose?
The largest amount you can comfortably afford to borrow
The largest amount you can comfortably afford to pay out of pocket
The smallest amount available to you
The largest amount available to you
What may happen if you increase your deductible?
Your premium goes up
Your premium goes down
You extend the length of your policy
The amount you owe in taxes can go down