Should we have raised our car insurance deductibles?
That’s the question I was asking myself a couple of weeks ago, after my husband hit a deer with his car on the way to work.
He wasn’t hurt. The deer was already dead (yes, he hit a dead deer), but the car suffered more than $5,000 in damage. Fortunately, the car only smells like dead deer when the heat is on.
About a year ago, I made the decision to raise the deductibles on our vehicles from $500 to $1,000. The move freed up an extra $30 a month in our budget – much needed with twins in diapers. We also figured that since we carried comprehensive coverage, we would be completely covered (no deductible to pay) if we should ever hit a deer.
Well, that’s how our policy used to be… It seems the policy changed sometime between the last time my husband hit a deer (more than 4 years ago), and two weeks ago. We were now required to pay the deductible. Not doing my homework on that was a painful lesson, let me tell you!
Fortunately, we have an emergency fund. If we hadn’t, I would have been in a panic, but instead we were able to deal with the situation (and lack of a car for awhile) with a sense of calm.
But it made me question whether raising the deductible on our comprehensive coverage was worth it.
Now bear with here: I’m about to attempt to do some math… which I am lousy at.
In the 10 years we’ve been together, we’ve had three deer collisions. If we had the $1,000 deductible(which we didn’t, but let’s just assume it for now), we would have paid $3,000 for all of the repairs. If we had saved $30 a month for those ten years, we would have saved $3,600.
So yes, it made sense for us to raise the deductible on our car insurance, barely.
The whole situation really struck me because insurance coverage can be such a gamble sometimes. You can make yourself broke paying for coverage you never need, or you could be under-insured and lose all your savings with one simple accident.
So for now, we’ll keep the things the same. And we’ll try to be safer drivers.