Need help with auto/home insurance math

[KBecks]

Hi Friends, I could use some help with insurance math.

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Our minivan valued at $10,000 has collision coverage with a $1,000 deductible.  This costs $120 / year for our policy.

To me that sounds like a good deal… is it?  Or should we skip that coverage?

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On our homeowners, we can increase the deductible (I need to check with the mortgage co.) to $5,000 (saves $173/year)  or $10,000 (saves $247/year).
 
Our home is pretty low-risk.  Is it worth it to change the deductible?


I am shopping other insurance companies, but for now I'm inclined to stay with our current company and dial down the coverage to save a little bit.  Our current insurance, auto/home/umbrella is costing $1,750/year.

[Greg]

Others will likely have better advice, but my advice on deductibles is that your deductible should be no higher than your cash emergency fund.  In other words, can you immediately pay your deductible in case of a claim?  If not, lower your deductible until you can.  This is in general, as other things apply depending on home vs. car claim.

[KBecks]

Hi Greg, yes, we have cash available to cover the deductibles.  I'm wondering more along the lines of -- if we have an accident every 10 years, and the cost is $120 year, that is $1,200 + $1,000 deductible cost.  But if we paid for a repair ourselves, it would probably cost more than $2,400 for a typical fix?  I am guessing yes, and that therefore, the $120/year cost for collision is a good deal. 

Does that make sense?  Am I calculating this right?

I upped our homeowner deductible to $5,000 today, removed the sump pump/basement flood coverage, and removed the insurance on my diamond engagement ring ($80/year on $5,000 value).  Now i just have to keep track of that ring….

[Cassie]

I would not drop collision on a car worth that much. I only drop it when the value gets down to about 2k. Otherwise I think it is worth the $.