Do the math...

I consider myself to be a pretty well educated person. I'm a semester away from a masters, including an undergrad minor in economics. I would also consider myself to be fairly well educated in street smarts. I actually used to teach home-buyer education classes and have owned 3 homes, so you'd think I would be able to figure out some thing like insurance. Actually, I did a lot of research. I shopped around before we moved in to our current house and asked a lot of questions. I specifically remember talking to the insurance agent about the deductible. When we lived here before our deductible was $500. She said our new deductible was 1%. She explained that this is actually much better for us because you only pay 1% of the claim so the smaller the claim the smaller the deductible. That seemed like a good deal to me. That should have been my first red flag. She also said, "this is how every one does it now" implying that I had no other options. We even shopped around for new policies last fall to figure out who gave us the best deal on car and home insurance.

You can imagine my surprise and frustration when we got hail damage and found out our deductible is actually $1795 - 1% of the policy value. WHAT?? Yep. Either our agent was a total idiot and didn't understand the policy herself, or she simply said what we wanted to hear to get us to go with them. Either way, it sucks!

Tim was equally as frustrated as he hates any time we get "screwed" financially. He takes it very personally, so he called the agent yesterday. She told him, "Well, we never do a $500 deductible any more because it costs an extra $130 per year. Um... do the math...

$1795 - 500 = $1295. At a difference of only $130/year, we would have to go almost 10 years without a single claim to make the larger deductible make sense. Yup, 10 years! And that's if you only have 1 claim that whole time.

Tim and I generally try to buy policies with low deductibles. I'm not saying we're accident prone, but we don't like big surprises and times of stress - like accidents and catastrophes. Luckily the $3400 worth of damage isn't critical stuff. We still have to wait until the spring to find out whether or not we'll need a new roof (which would be added to that total with no new deductible - one good thing). For now there are only a couple things we need to look in to right away - getting the a/c fixed so the dents don't affect the operation and blow the whole thing up and new gutters. Our gutters needed a serious look anyway. I don't think we have enough downspouts or the right pitch or some thing because we ran in to water damage last year. We'll just have to see how far we can stretch the $1000 check we're getting (the difference after the deductible and some crap about State Farm holding on to money for depreciation).

So there you have it. Learn from our mistake... ask twice, read the fine print, and ask again. Ultimately, it's my fault for not getting it in writing. I won't make that mistake again.