The best insurance deductible to have in Oklahoma.

What is the best insurance deductible in Oklahoma anyway? I would like to show a connection between our insurance deductible and our savings/emergency account.

When it comes to buying insurance, which do you think has the bigger impact on the cost of the policy – the amount of your coverage or the amount of your deductible?

If you answered “deductible”, you would be correct!

I talk to people all the time about the cost of insurance. Many are convinced they’re paying too much. They may be right – but probably not for the reasons they think.

Most people want the best coverage and the lowest price. That’s like wanting the best food, car, or house, and the lowest price.

You get what you pay for. Best and cheap don’t go together in any other industry, insurance is no different.

My most common recommendation to people is simple. To save money on insurance, you should be more self-insured.

You don’t have to be a millionaire to do it. It’s really not a huge gamble either.

I sell insurance, believe it or not, and this is some of the best advice I can give my clients. It’s important that my clients trust me, so it’s not advice I give just as a method of saving money.

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I am not talking about being uninsured or even underinsured. I’m talking about buying proper insurance coverage with the highest deductible that’s practical for you.

I’ll let you in on a secret. Higher deductibles mean lower insurance premiums. Okay, maybe that’s not a secret.

Now before I go any further let me set a BIG RED LINE between health insurance and ANY other insurance policy.  Health insurance in NOT insurance at all any more. Real insurance requires a qualification process. The cost is based on your particular risk factors and how much you use your coverage. Since health insurance doesn’t work this way, my recommendation of higher deductibles doesn’t really apply to health insurance the same way.

Human nature is hard to overcome. For some reason, we are more likely to envision bad things happening to us than good things when it comes to what we are insuring.

The people that tell me they are paying too much for insurance are usually those who follow that comment with the qualifier that they haven’t had a claim in years, if ever.

I will usually ask them to consider a higher deductible. After all, they use their insurance policy so infrequently it makes no sense to have a low deductible, in my opinion.

Two things usually happen.

First, they ask, “Well, how much would I save?” So, I tell them.

Then, they start thinking about this higher deductible they could potentially have to come up with. They almost always say the decreased cost doesn’t save them enough to justify the higher potential deductible cost.

Their years of experience of having no claims cannot overcome their mental picture of having to come up with $1,000 instead of $500 IF they have a claim.

Two things that can make this decision easier are – a savings plan and discipline to maintain it.

Fortunately for insurance companies, those two traits just eliminated about 90 percent of the population. That, and they know that human nature will convince most people to pay a little more insurance premium to have a lower deductible.

I’m an insurance guy, so humor me for a minute while I get all actuarial on you.

A recent survey by GOBankingRates showed that 57% of Americans have less than $1,000 in savings and 39% have absolutely nothing in savings. This means practically any financial issue that comes up in our life is an economic emergency. An insurance claim can certainly be one of those emergencies.

Most people finance their emergencies with credit. While credit cards definitely have a place in a family’s finances, they can create a cycle of debt that is hard to break.

Am I saying that having a $1,000 savings account balance can change your financial life? Yeah, I guess I am.

So, how does your insurance deductible factor into this?

The savings from carrying a higher insurance deductible could be used to fund your savings account (with discipline).

The average savings on your car insurance by raising your deductible from $500 to $1,000 would be about $300 per year for a multi-car family, according to CarInsurance.com.

I put that statistic to the test. I checked the cost difference for my own insurance. We have three cars and three drivers. One of the drivers is my teenage daughter. The annual savings between a $500 and $1,000 deductible would be $454. (I do have a $1,000 auto insurance deductible if you’re wondering.)

That’s just savings on car insurance. If you do this with all of your insurance you start to see the growth of your savings account. It’s amazing how this can produce the confidence to continue saving.

So, what is the best insurance deductible in Oklahoma? It’ll be unique to you. But it is an important consideration for more than just the price you pay for insurance.

I hope you can see my point. I’m certainly not trying to make us all feel like financial failures. I am trying to give us a starting point to get some control over our financial life. I am using the insurance example because that’s my field. You may have a better place to start. The important thing is to get started!

Call our office today at 405-340-0606.

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Are you ready to save time, aggravation, and money? The team at Allen Drew Insurance Agency is here and ready to make the process as painless as possible. We look forward to meeting you!

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