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Sunday, March 8, 2009

Collision Deductible

From the Hoss's Mouth

In today's tough economic times many insurance blogs and money magazines suggest that one way to reduce expenses is for insurers (that's you) to consider increasing the deductibles on some of their insurance policies. The most popular money magazine suggestion is to increase the collision deductible on your car insurance.

The Hoss and Mrs. Hoss have two vehicles: a 1991 Ford F-150 and a 2005 Chevy Blazer. Currently, we carry no collision insurance on the Ford F-150, and on the Chevy Blazer we have a collision policy with a $300 deductible. The logic behind these widely differing collision policies is simple. The Ford F-150 does not have a high cash value, and in the event of an accident, in all likelihood the insurance company would, rather than repair the vehicle, write it off and give us its cash value. The Blazer on the other hand does have considerable value and would probably be repaired.

Recently it was time to renew the insurance on our Chevy Blazer. The Hoss seriously pondered whether or not to increase the collision deductible to $1000 or higher. To do so would be against the advice of Mrs. Hoss, as she strongly believes items of value should be fully insured. But The Hoss thought what does she know? We could save a few dollars just by increasing the collision deductible, after all we have no fault insurance and we are both good drivers and would never cause an accident. We could go out to dinner with the money we save. The Hoss is wise.

For some unexplained reason, while in the insurance broker's office, The Hoss changed his mind and decided the best course of action would be to follow Mrs. Hoss's instincts and stay with the $300 collision deductible.



collision deductible

Two weeks later, The Hoss was involved in a minor fender bender causing over $1000 damage to the Blazer. Do I have to tell you that The Hoss is thankful to Mrs. Hoss for her foresight?

The moral of the story is twofold. One, increasing your insurance collision deductibles is not always the best choice. Two, listen to your wife.

Stay on track,

The Hoss


Next Hoss Cents Free Financial Money Magazine Post: March 15, 2009
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