The whole concept of insurance revolves around protecting the
assets of an individual from financial loss due to an
unpredictable event. The reason that we purchase insurance is to
protect ourselves from financial disasters. We rely upon the
insurance company to take on the risk in exchange for the
premiums that we pay. The average consumer spends very little
time thinking about insurance purchases. The insurance
professional is expected to do most of the thinking for us and
advise us on what is best.
There is a simple principle that can be applied to almost all of
your property and casualty insurance purchases that will save
you premium dollars. Self insuring is that principle. The smart
insurance shopper eventually grasps the concept of self
insurance. The whole idea around self insurance is using
deductible options and eliminating unnecessary coverage. The
days of the $100 Collision deductible on auto insurance is
fading fast and it should. The higher deductible saves you in
premium dollars. That is what we call self insuring. When you
change your deductible from $100 to $500 you are taking on the
risk for the first $500 of physical damage. You can do the same
on the homeowner's policy. You will lower your premium and still
be covered for any major loss.
You will save a ton of money in the long run. You don't have
enough claims over a lifetime to warrant having a low
deductible. You are paying the insurance company money for
services they may never perform. You will save thousands of
dollars by keeping your deductibles $500 or higher.
There are a lot of optional coverage's in auto and homeowners
insurance that you may want to eliminate to save money. Most
states have tort options. Tort is your right to sue. Full tort
verses limited tort can sometimes be a difference of 20% in your
auto insurance premium. Rental reimbursement and towing benefits
are added onto auto insurance all the time. You may want to self
insure for these and save premium dollars as well.
The insurance purchase can be easier and more affordable if you
can grasp the mindset of self insuring. Your agent will welcome
your thinking on this because most agents think self insurance
is best for their customers.
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