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.
Tax Refunds Rebound
Smaller refunds in the first few weeks of the current tax season were shaping up to be a political problem for Republicans, but new data from the IRS shows that the value of refund checks has snapped back and is now running 1.3 percent higher than last year. The average refund through February 23 last year was $3,103, while the average refund through February 22 of 2019 was $3,143 – a difference of $40. The chart below from J.P. Morgan shows how refunds performed over the last 3 years.
Number of the Day: $22 Trillion
The total national debt surpassed $22 trillion on Monday. Total public debt outstanding reached $22,012,840,891,685.32, to be exact. That figure is up by more than $1.3 trillion over the past 12 months and by more than $2 trillion since President Trump took office.
Chart of the Week: The Soaring Cost of Insulin
The cost of insulin used to treat Type 1 diabetes nearly doubled between 2012 and 2016, according to an analysis released this week by the Health Care Cost Institute. Researchers found that the average point-of-sale price increased “from $7.80 a day in 2012 to $15 a day in 2016 for someone using an average amount of insulin (60 units per day).” Annual spending per person on insulin rose from $2,864 to $5,705 over the five-year period. And by 2016, insulin costs accounted for nearly a third of all heath care spending for those with Type 1 diabetes (see the chart below), which rose from $12,467 in 2012 to $18,494.
Chart of the Day: Shutdown Hits Like a Hurricane
The partial government shutdown has hit the economy like a hurricane – and not just metaphorically. Analysts at the Committee for a Responsible Federal Budget said Tuesday that the shutdown has now cost the economy about $26 billion, close to the average cost of $27 billion per hurricane calculated by the Congressional Budget Office for storms striking the U.S. between 2000 and 2015. From an economic point of view, it’s basically “a self-imposed natural disaster,” CRFB said.
Chart of the Week: Lowering Medicare Drug Prices
The U.S. could save billions of dollars a year if Medicare were empowered to negotiate drug prices directly with pharmaceutical companies, according to a paper published by JAMA Internal Medicine earlier this week. Researchers compared the prices of the top 50 oral drugs in Medicare Part D to the prices for the same drugs at the Department of Veterans Affairs, which negotiates its own prices and uses a national formulary. They found that Medicare’s total spending was much higher than it would have been with VA pricing.
In 2016, for example, Medicare Part D spent $32.5 billion on the top 50 drugs but would have spent $18 billion if VA prices were in effect – or roughly 45 percent less. And the savings would likely be larger still, Axios’s Bob Herman said, since the study did not consider high-cost injectable drugs such as insulin.
