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Are you carrying a low deductible?

Are you carrying a low deductible?

When considering an insurance policy we often focus on the price of the deductible that the policy offers. We are often willing to pay a higher premium to ensure a lower deductible. But does paying a higher premium actually save you money?

How many times do people file a claim to use that low deductible? Statistically, not often. According to an Ace Private Risk Services survey, in 2012 81% of insurance agents reported that savings opportunities were missed for insureds that focused on low deductibles. The reality is most individuals are not taking advantage of that low deductible due to fear of the rising cost of a premium after filing a claim, specifically a claim of $2,000 or less. There may be years when you don’t end up filing any claims because you did not experience any damages or losses. You even might have found a way to pay out of pocket for smaller damages or losses.

The truth is that people are paying a higher premium for a lower deductible that they are not even using. It is worth considering how much you could pay out of pocket for a loss without significantly affecting your lifestyle. Ask your agent to look for policies with deductibles closer to that amount. This simple change in perspective could save you a substantial amount of money over time.

Vero has a high-net-worth client who switched from a lower deductible, $1,000.00, with a higher premium, $4,964.87, homeowner’s policy to a higher deductible, $5,000.00, with a lower premium, $4,204.47. This switch is saving our client $760.40 annually. In less than five and a half years, our client will have saved $4,000.00. That saved $4,000.00 will make up the deductible difference in the switchover of policies.

Basically, when you are considering any homeowner’s policy it never hurts to look at the bigger picture. Instead of focusing solely on the deductible cost, consider the combination of the following factors: the frequency in which you file claims, your income, your lifestyle, and long-term savings versus immediate costs.

At Vero, we want to ensure you’re making the smartest decision for yourself, and we will present policies with your long-term savings in mind.


Interested in learning more? Please email us at or call 773-945-6000.

Vero Insurance is a niche broker with a focus on providing insurance placement and risk management services to high-income families. Here at Vero, we love to provide you with exciting and fun articles to learn more about insurance and how it impacts your life. Visit our other blogs to find more information.

While Vero does offer a wide variety of personal insurance coverages, our main coverages include: personal umbrella insuranceauto insurance, and homeowner’s insurance.