Report: Raising home insurance deductible in R.I. means savings, but may not be worth risk

INSURANCEQUOTES SAID Rhode Island homeowners stand to save 14 percent, the second-highest savings in the United States, if they raise their home insurance premiums to $1,000 from $500. / COURTESY INSURANCEQUOTES
INSURANCEQUOTES SAID Rhode Island homeowners stand to save 14 percent, the second-highest savings in the United States, if they raise their home insurance premiums to $1,000 from $500. / COURTESY INSURANCEQUOTES

PROVIDENCE – Rhode Island homeowners stand to save 14 percent, the second-highest savings in the United States, if they raise their home insurance premiums to $1,000 from $500, according to a study by insuranceQuotes.com.

That trails only North Carolina, as homeowners there will receive 16.4 percent savings by changing the deductible.
If Rhode Islanders increase the deductible to $2,000 from $500, the savings is even greater at 27 percent, and grows to 39 percent by switching the deductible to $5,000 from $500, the report said.
On average, U.S. consumers will save 7 percent by raising a deductible to $1,000 from $500, 16 percent by raising it to $2,000 from $500 and 28 percent by raising it to $5,000 from $500.
While changing the deductible is a way to save on premiums, it may not always be the best financial move, insuranceQuotes said.
“Choosing a higher deductible means you share more potential financial risk with an insurer and also makes you less likely to file a claim. In return, insurers charge a lower premium,” Laura Adams, senior insurance analyst for insuranceQuotes, said in a statement.
North Carolina homeowners experience the highest savings when switching to premiums of $2,000 or $5,000 from $500 – 39 percent and 45 percent, respectively.
Texas, Hawaii and Indiana had the lowest savings, as homeowners saved less than 7 percent on average by increasing a deductible to $2,000 from $500.
“What you do with your home insurance deductible should depend on where you live. If there’s no significant savings, it may not make financial sense to increase your deductible. Be sure to review your coverage every couple of years to make sure your policy and insurance provider is still right for you,” Adams said.
Mike Barry, Insurance Information Institute spokesman, said many states with the most significant savings are those that also have a very high risk for natural disasters, such as hurricanes and tornadoes.
“If you’re living in a state with a significant number of natural disasters and you, as a policyholder, are willing to absorb more of the risk with a higher deductible, your insurer is going to give you a more substantial break in your premium,” Barry said.
InsuranceQuotes commissioned Quadrant Information Services to examine the impact of changing a homeowner’s insurance deductible in every U.S. state and the District of Columbia. Quadrant looked at data from the largest carriers in each territory.

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