Insurance is all about protecting yourself from loss as well as possible. The reason that we purchase insurance is to protect ourselves from financial disasters. We rely upon the insurance company to take on the risk in exchange for the premiums that we pay. The average consumer spends very little time thinking about insurance purchases. The

The Self Insuring Principle

Self insuring is a great way to save a lot of money on your homeowner insurance each year.  The whole idea around self insurance is using deductible options and eliminating unnecessary coverage. The days of the $100 collision deductible on auto insurance is fading fast and it should. The higher deductible saves you in premium dollars. That is what we call self insuring. When you change your deductible from $100 to $500 you are taking on the risk for the first $500 of physical damage. You can do the same on the homeowner’s policy. When you do this you are taking the brunt of the financial situation a bit more, but over time it is worth it, especially if you never have to call upon the coverage. If you don’t have many or any claims on your record, you will save thousands of dollars by keeping all deductibles $500 or even higher.

As you are probably well aware, there are a lot of optional coverage options in auto and homeowners insurance that you may want to eliminate to save money. Most states have tort options. Tort is your right to sue. Full tort verses limited tort can sometimes be a difference of 20% in your auto insurance premium. Rental reimbursement and towing benefits are added onto auto insurance all the time. You may want to self insure for these and save premium dollars as well.

Self insuring is simply a principal that will allow you to get the cheap homeowners insurance that you have wanted without giving up good coverage. This is a great way to ensure that you have all of the coverage that you need on any budget.