The Easiest Way to Cut Your Home Insurance Bills
Here's a simple way to potentially cut $150 from your annual insurance expenses: Raising your homeowners’ insurance deductible from $500 to $2,000 could lower your premiums by an average of 16 percent, according to a new report by InsuranceQuotes.com. Based on the average insurance premium of $978, that works out to more than $150 a year in savings.
Of course, that lower bill comes with some caveats. First, the amount you save could vary widely depending on where you live and other factors. In the new study, the savings from a higher deductible ranged from 41 percent for North Carolina homeowners to just 4 percent in Hawaii.
Second, a higher deductible means that you would be on the hook to pay more out of pocket before your insurance coverage kicks in if something happened to your home. Before making the switch, be sure you have enough money in your emergency savings to cover the total cost of the deductible.
“Consumers need to consider the bottom line before increasing deductibles,” Laura Adams, a senior analyst with InsuranceQuotes.com 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.”
Related: The Best Time to Buy Car Insurance
Increasing a deductible from $500 to $1,000 resulted in an average savings of 6 percent nationally, ranging from 25 percent in North Caorlina to a low of 1 percent in Kentucky.
As your deductible gets higher, it may become less likely that you file a claim at all, since doing so will push your premium up. A separate analysis last fall by insuranceQuotes.com found that a single claim—even if it’s denied—can hike your homeowners’ insurance by an average of 9 percent a year, which can amount to hundreds of dollars.
Chart of the Day: Boosting Corporate Tax Revenues
The leading candidates for the Democratic presidential nomination have all proposed increasing taxes on corporations, including raising income tax rates to levels ranging from 25% to 35%, up from the current 21% imposed by the Republican tax cuts in 2017. With Bernie Sanders leading the way at $3.9 trillion, here’s how much revenue the higher proposed corporate taxes, along with additional proposed surtaxes and reduced tax breaks, would generate over a decade, according to calculations by the right-leaning Tax Foundation, highlighted Wednesday by Bloomberg News.
Chart of the Day: Discretionary Spending Droops
The federal government’s total non-defense discretionary spending – which covers everything from education and national parks to veterans’ medical care and low-income housing assistance – equals 3.2% of GDP in 2020, near historic lows going back to 1962, according to an analysis this week from the Center on Budget and Policy Priorities.
Chart of the Week: Trump Adds $4.7 Trillion in Debt
The Committee for a Responsible Federal Budget estimated this week that President Trump has now signed legislation that will add a total of $4.7 trillion to the national debt between 2017 and 2029. Tax cuts and spending increases account for similar portions of the projected increase, though if the individual tax cuts in the 2017 Republican overhaul are extended beyond their current expiration date at the end of 2025, they would add another $1 trillion in debt through 2029.
Chart of the Day: The Long Decline in Interest Rates
Are interest rates destined to move higher, increasing the cost of private and public debt? While many experts believe that higher rates are all but inevitable, historian Paul Schmelzing argues that today’s low-interest environment is consistent with a long-term trend stretching back 600 years.
The chart “shows a clear historical downtrend, with rates falling about 1% every 60 years to near zero today,” says Bloomberg’s Aaron Brown. “Rates do tend to revert to a mean, but that mean seems to be declining.”
Chart of the Day: Drug Price Plans Compared
Lawmakers are considering three separate bills that are intended to reduce the cost of prescription drugs. Here’s an overview of the proposals, from a series of charts produced by the Kaiser Family Foundation this week. An interesting detail highlighted in another chart: 88% of voters – including 92% of Democrats and 85% of Republicans – want to give the government the power to negotiate prices with drug companies.
