Effectively managing insurance costs goes beyond simply considering coverage limits, coverage options and premium amounts. It also involves considering what costs you are willing to pay out of pocket in the form of deductibles.

Experts recommend that it’s better to view insurance protection as coverage for more catastrophic situations…a major fire, a severe car accident or a financially devastating lawsuit rather than coverage for smaller losses, which makes a higher deductible worth considering.

Insurance companies look at the frequency (how often) and the severity (dollar amount) of an insured’s claim history as factors when determining your insurance premiums. Not only can these factors result in increased premiums, but in some cases, companies may non-renew a policy based on claim history. Given this reality, it may not always be in a person’s best interests to submit claims for minimal amounts.

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 deductibles of $1,000 or higher 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.