Managing Insurance Costs…Understanding Deductibles, Frequency and Severity

February 15, 2016||inBusiness Insurance, Personal Insurance|auto insurance, business insurance, claims, deductibles, homeowners insurance, personal insurance

Effectively managing insurance costs goes beyond considering coverage limits, options, and premium amounts. It also involves considering what fees you will pay out of pocket in deductibles.

Experts recommend viewing insurance protection as coverage for more catastrophic situations, such as a major fire, a severe car accident, or a financially devastating lawsuit, rather than for more minor losses. This makes a higher deductible worth considering.

Managing Insurance Costs...Understanding Deductibles, Frequency and Severity
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Insurance companies consider the frequency (how often) and severity (dollar amount) of an insured’s claim history when determining premiums. These factors can result in increased premiums, and in some cases, companies may not renew a policy based on claim history. Given this reality, submitting claims for minimal amounts may not always be in a person’s best interests.

Consider the following strategies to keep premium costs down and get the most value when it comes to coverage:

  • Choose the highest deductible you can afford — This lowers premium costs. At Murphy Insurance, we strongly advocate having $1,000 or higher deductibles on your policies.
  • Don’t risk a lot for a little — You may want to redirect some of the savings from increasing your deductible into purchasing a higher level of protection. It often doesn’t cost significantly more and could make all the difference in a catastrophe.

Please Contact Us at Murphy Insurance to discuss your insurance coverage, premiums, and deductibles.

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