This is part of a series in which we re-evaluate Money Magazine’s “25 Rules To Grow Rich By”. One “rule” will be re-evaluated each weekday until the series concludes; you can keep tabs on the action at the 25 Rules index.
Rule #16: When you buy insurance, choose the highest deductible you can afford. It’s the easiest way to lower your premium.
I flatly agree with this rule.
Of course, when I look at it again, I realize that it’s not including the other big factor in ensuring a low premium: taking advantage of the competition. Insurance carriers are always competing for customers, so there’s nothing but upside for consumers to take some time to review the offerings from other insurance companies.
This is especially true in the internet era, where you can quickly obtain rate quotes from many different insurers with only a mouse click. While the savings that you can obtain from a higher deductible is usually sizeable, combining it with the insurance provider with the lowest rates will usually move money out of the coffers of the insurance giants and straight into your pocket. Let’s rewrite this rule.
Rewritten Rule #16: When you buy insurance, compare the packages at multiple insurance providers with the highest deductible you can afford. It’s the easiest way to lower your premium.