Accounting Insurance Purchasing

GPI 025 – To cut rising insurance premiums, raise your deductibles as your firm grows!

One easy way to reduce the percentage of insurance premiums is to accept a higher deductible level threshold deducted on the payment of claims.  Claims normally do not happen often so you might as well cut your premium costs now, save money as long as you can and reserve some of the savings if you think and are worried about paying the revised deductible on the next large claim.

Your deductible amount before reimbursement should follow the general increase in the growth of the company.  Ask your broker to provide new quotes on all of your coverages with higher deductibles.  For example, for automobiles, raise your deductible from $500 to $1,000 or even $2,000 per claim.  For general liability, if you have $10,000 now, raise it to $25,000.  If you have $25,000 as a deductible, raise it to $50,000.  Evaluate how often you have had claims and decide accordingly.

If your broker does not encourage you to do this or is not able to find better rates for you, tell him you need to go to other brokers to obtain new quotes because there must be some savings for an increased deductible.  He will most likely respond favorably.

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