Massachusetts residents can save more than those in other areas of the country by increasing their auto insurance deductible, according to a recent study.
A Quadrant Information Services study, commissioned by InsuranceQuotes, did a state- by-state analysis, breaking down how much residents nationwide can save, and found how much you save varies considerably on where you live.
Massachusetts residents can save an average of 17 percent when increasing their deductible from $500 to $1,000 – the most significant savings in the country. That same deductible increase in Michigan only gives those residents an annual savings of 4 percent, the lowest in the country.
The study examined two different increases and respective average savings based on the average annual automobile insurance premium of $841, according to the National Association of Insurance Commissioners. Those included: A 9 percent savings ($72) when increasing the deductible from $500 to $1,000 and a 15 percent savings ($126) when increasing from a $500 to a $2,000 deductible.
The study found South Dakota drivers benefit the most in the category of raising their deductible from $500 to $2,000, saving on average 29 percent. But that same deductible increase in North Carolina only results in a discount of 6 percent on average.
Because insurance companies use deductibles as one of the ways to determine how much risk a car owner is willing to accept, with higher deductibles meaning drivers take on more risk, the more risk taken on by the driver makes it cheaper for companies to insure those individuals.
Additionally, your driving profile, including your age, driving history, location, car make and model, etc … will also dictate what savings you will receive and if it’s worth it to raise your deductible, according to Penny Gusner, a consumer analyst with Insure.com. Which is why, according to the study, reducing your deductible can save you money, at least in the Bay State.
Local
In-depth news coverage of the Greater Boston Area.
Gusner says she’s a proponent of pricing out your car insurance policy with different deductible amounts because it’s true a higher deductible will save you money since you lessen the potential payout from your insurer.
“I also believe it's normally wise to try to pay out-of-pocket for minor damage to your vehicle and leave insurance claims with your insurer for major damage; thus a higher deductible would suit this philosophy,” she adds.
