Difference Between $100 and $1,000 Deductibles is Only $14 Per 12 Months... So What's the Catch?

[OldGeorge1950]

I was reviewing my family auto policy. In the last 10 years, there were only
two collision claims. One was when my car lost traction on ice in an airport
parking garage. The impact occured at less than 2mph(walking speed) and
caused about $2500 damage that Geico paid. The other one was a deer
collision caused by a deer who jumped into traffic.

I've had $1,000 deductibles on all the vehicles on the policy. I changed it
around on Geico's website and if I lower the deductible down to just $100,
the increase per car is only $11 to $14 per 12 months.

Seems like a good idea to me for such little extra money. However, I'm
wondering if there's a catch somewhere???

Thanks in advance for your reply.

 

[djs]

No real catch, except that by your own numbers, its not really worth it. Lets look at this a little closer.....

I'm going to go with $12 per month per car and then assume 1 car. This makes $12 per month times 12 months = $144 per year additional premium (per car).

In the incidents you describe, the deer is a comprehensive claim, not a collision claim. Lowering your comp deductible may have no real impact on the premium, go for that one.

So, one collision claim in 10 years. You pay $1000 for the claim.
At $100 deductible, you pay $144 per year more ($1440) plus $100 for the claim, total of $1550, or 50% more. You financed the lower deductible.

That said, sometimes having a lower deductible is worth it for the piece of mind of not having to write a $1000 check when an accident happens.

Also, when doing these comparisons, I usually like to use a 4 year period without a claim for autos, which is more common. If I do that, then the $100 deductible makes a lot more sense.

The short answer is Geico is rating you as a very good, low risk driver. Do what makes you more comfortable.

Dan

 

[OldGeorge1950]

No real catch, except that by your own numbers, its not really worth it. Lets look at this a little closer.....

I'm going to go with $12 per month per car and then assume 1 car. This makes $12 per month times 12 months = $144 per year additional premium (per car).

In the incidents you describe, the deer is a comprehensive claim, not a collision claim. Lowering your comp deductible may have no real impact on the premium, go for that one.

So, one collision claim in 10 years. You pay $1000 for the claim.
At $100 deductible, you pay $144 per year more ($1440) plus $100 for the claim, total of $1550, or 50% more. You financed the lower deductible.

That said, sometimes having a lower deductible is worth it for the piece of mind of not having to write a $1000 check when an accident happens.

Also, when doing these comparisons, I usually like to use a 4 year period without a claim for autos, which is more common. If I do that, then the $100 deductible makes a lot more sense.

The short answer is Geico is rating you as a very good, low risk driver. Do what makes you more comfortable.

Dan

The $14 difference for each car is for the entire year, not per month. So it's basically just about $1 more per month for me for each car.

 

[donamese]

For $14 per year I would do it all day just in case.

 

[djs]

The $14 difference for each car is for the entire year, not per month. So it's basically just about $1 more per month for me for each car.

Make sure you are looking at this correctly, but if this is the case, then absolutely go for it.

With Geico, they tend to show you the difference in the remaining policy period. Each policy period is 6 months (not a year) and if you are 4 or 5 months into it, this could just be the change for a short time. Make sure you find the total policy premium, not just the pro-rated amount for the policy period.

Not saying you are misreading it, but I've known it to happen with others on making changes. In this case, the premium difference doesn't make any real sense, so my guess is, you are seeing a pro-rated premium change amount, not the full 'new' premium amount.

Dan

 

[INSUREGEEK]

Dan is right - something's not adding up if OP is talking an annual term.

That said, and I've ranted on this recently, it is important to look at what you can readily come up with if your car is wrecked and not driveable right now! If you can easily come up with $1000....keep the deductible high and save those premium dollars.

If you're going to be begging and borrowing for that $1000 to get your car fixed (or worse, in the lurch if the car is a total loss).....look long and hard at your budget, and make decisions from there. Please make sure that premium savings goes to something more important than beer and smokes. Like a savings account for emergencies.

 

[OldGeorge1950]

Make sure you are looking at this correctly, but if this is the case, then absolutely go for it.

With Geico, they tend to show you the difference in the remaining policy period. Each policy period is 6 months (not a year) and if you are 4 or 5 months into it, this could just be the change for a short time. Make sure you find the total policy premium, not just the pro-rated amount for the policy period.

Not saying you are misreading it, but I've known it to happen with others on making changes. In this case, the premium difference doesn't make any real sense, so my guess is, you are seeing a pro-rated premium change amount, not the full 'new' premium amount.

Dan

I called Geico and spoke with a live gecko. He confirmed that the difference
was only $14 for the entire year(actually $7.32 for the 6-month policy period)
if I choose to go change my deductible from $1,000 to $100. I told him to
go ahead to make the change.

 

[BlockO]

I called Geico and spoke with a live gecko. He confirmed that the difference
was only $14 for the entire year(actually $7.32 for the 6-month policy period)
if I choose to go change my deductible from $1,000 to $100. I told him to
go ahead to make the change.

are you sure they lowered BOTH comprehensive and collision deductibles (and btw, collisions with animals are comprehensive claims, not collision)?

If that's the case, then sure! Go for it! Deal of the century.

sorry if people sound skeptical. it's just that it sounds too good to be true. the only time I've ever seen someone get close to that good of a deal was on a classic/antique car auto policy.

 

[INSUREGEEK]

Yeah....no one their right mind would buy that $1000 deductible IF the $100 was only $14 more?? Plus most companies I know don't even offer a $100 deductible these days.

My policy was about $20/month = $240/year - difference between $500 and $1000?!? And that's just my car with clean record and loyalty discounts. We're talking a $100 deductible here?

Sorry. Not buying/believing it. There's a snake in the woodpile.

 

[BlockO]

I called Geico and spoke with a live gecko. He confirmed that the difference
was only $14 for the entire year(actually $7.32 for the 6-month policy period)
if I choose to go change my deductible from $1,000 to $100. I told him to
go ahead to make the change.

would you happen to be real close to the renewal date on your policy?

that would explain it.