High Deductible Auto Policy Savings – Not So Much In Florida

High Deductible Auto Insurance Policy Florida

You’ve probably been told at some point from a family member, friend or an insurance agent that you could potentially save on your auto insurance policy if you’re willing to raise the deductible on your auto insurance policy. I recent study was completed by insurancequotes.com that compared the savings a consumer could receive should they raise their collision deductible from $500 to $1000. The national average was an 8.5% discount. Not surprising, Florida ranked dismally in the 50th position with an average savings of 4.4%. Florida was only out-done by Michigan, which came in 51st position with an average discount of 3.8%. The 4.4% discount that Florida residents receive, on average, amounts to a measly annual savings of $51. If we all lived in Massachusetts, the #1 savings state, we would enjoy an average annual savings of $169. Do not be discouraged though, as this is just a survey and not all individuals situation is the same. Even with the depressing discount, I would still strongly recommend looking into your current policy and review all of your options with an insurance professional.

Why A Higher Deductible Can Make Sense In Florida?

You might say well a higher deductible means more out of my pocket if I get in an accident that’s my fault! You would be right, but listen for a moment. By selecting a higher deductible you will be saving some on your auto policy, whatever your individual discount may be. That money can be saved for emergencies, in case you do get in an accident. But if you don’t have any auto accidents, those funds are in your control, not the insurance company. According to the Consumer Federation of America, consumers only get 65 cents of $1 back in claims. So where does that 35 cents go?… So even though we live in Florida, where we don’t get much of a discount for taking a higher deductible, it still could make good sense for you to do so! Knowing that for every dollar you give your insurance company you’ll only get back 65 cents, should you make a claim, is a pretty bad deal!

What Not To Do!

With this savings strategy there is one very important thing to keep in mind! When contemplating whether or not to raise your auto deductible, never take out a deductible that you won’t be able to pay. Sure, the savings you’ll get from a high deductible policy may be attractive, but don’t let it put you in a position where you could be up a creek without a paddle. If this mistake is made and you are in an accident, you could be left with a vehicle that you can’t afford to repair. Remember, if you choose to take a higher deductible for the savings, make sure you’re actually putting that money aside. It is very easy to just spend that extra coin each month!

What You Should Do…

Should you decide to raise your auto policy’s deductible to take advantage of the discount, my recommendation would be to establish an automatic savings plan. It is very easy to have your bank transfer the amount you’re saving each month, due to the higher deductible, into another checking or savings account. This way you’re saving money each month and you don’t have to do a thing! Heaven forbid you have an accident, you’ll have funds set aside to cover your deductible and get you back on the road in no time!

Next Steps…

Whether or not you’re thinking about raising your auto insurance deductible, I strongly recommend if you haven’t reviewed your policy in the last 6 months, now is the time! With the New Year comes new resolutions and I’m sure there’s plenty of you that have “being a better saver” on your list. There are plenty of areas where you can save on your auto policy, not just by raising your deductible!

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A Blog offering Tips and helpful navigation to better Insurance coverage in the State of Florida

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