Report: R.I. residents could save 14% on homeowner’s insurance by raising deductible to $1,000

RHODE ISLAND residents could save 14 percent on their homeowner's insurance - the second highest savings in the nation - if they raise their deductible to $1,000 from $500, according to a new insurancequotes.com report. / COURTESY INSURANCEQUOTES.COM
RHODE ISLAND residents could save 14 percent on their homeowner's insurance - the second highest savings in the nation - if they raise their deductible to $1,000 from $500, according to a new insurancequotes.com report. / COURTESY INSURANCEQUOTES.COM

PROVIDENCE – Rhode Island residents could save 14 percent on homeowner’s insurance by raising their deductible from $500 to $1,000, according to a new insuranceQuotes.com report.
That represents the second-highest savings in the nation, according to the website, behind only North Carolina at 25 percent. Massachusetts residents would save 13 percent, representing the third-most savings, the report said.
Switching from a $500 deductible to a $1,000 deductible results in an average savings of 6 percent nationally.
If the deductible is raised from $500 to $2,000, the savings is even greater, at 26 percent in Rhode Island, again topped only by North Carolina, which would save 41 percent, the highest in the country.
On average, raising a homeowner’s insurance deductible from $500 to $2,000 lowers the average annual premium by 16 percent nationally, the report said.
Raising the deductible to $2,000 would save Florida residents 23 percent, Connecticut, 22 percent; Pennsylvania, 21 percent; and Massachusetts, 20 percent. However, savings would be minimal in Hawaii at 4 percent; Indiana, 6 percent; and Texas, also 6 percent.
“These meager savings probably aren’t enough to justify the added financial risk of a higher out-of-pocket deductible,” the report stated.

“Since savings vary so much from state to state, consumers need to consider the bottom line before increasing deductibles,” Laura Adams, insuranceQuotes.com’s senior analyst, said in a statement. “While switching from a $500 deductible to a $5,000 deductible sounds appealing because it lowers home insurance premiums by an average of 28 percent, it could be a risky move for consumers who don’t maintain that much in savings.”

Mike Barry, spokesman for the nonprofit Insurance Information Institute, said it is important to point out that many states with the most significant savings are states that also have a very high risk for natural disasters like hurricanes and tornadoes.
The study used a hypothetical two-story, single-family home covered for $140,000. According to the National Association of Insurance Commissioners, the average U.S. home insurance premium is $1,034.

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