Increasing your car insurance deductible from $500 to $1,000 can save the average consumer 9 percent on his car insurance premium, according to a new analysis by Insurancequotes.com, but it depends where you live.
Car insurance isn’t the only place consumers can save by raising their deductible. Increasing your homeowners’ insurance deductible from $500 to $1,000 could shave a full 25 percent off of your premiums, according to the Insurance Information Institute. And as any Obamacare consumer will tell you, health insurance works the same way.
The key for consumers is to make sure that they have enough money in an emergency fund to cover that deductible should the need arrive.
Related: The Best Time to Buy Car Insurance
The amount you can save varies by state. Increasing an auto deductible from $500 to $1,000 would yield a 19 percent savings in Massachusetts, but just a 4 percent decrease in Michigan, according to the InsuranceQuotes study.
“In some states you can save hundreds of dollars each year by signing up for a higher deductible, but in others, the reward is so small that it doesn’t make sense to risk the higher deductible,” InsurangeQuotes senior analyst Laura Adams said in a statement. “This is a good reminder that doing a little research and knowing what’s available to you can really pay off in the long run.”
The InsuranceQuotes study found that boosting a car insurance deductible from $500 to $2,000 would save the consumer an average 16 percent.
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