The reason that we purchase insurance is to protect ourselves from financial disasters. We rely upon the insurance company to take on the risk in exchange for the premiums that we pay. The average consumer spends very little time thinking about insurance purchases.

There is a simple principle that can be applied to almost all of your property and casualty insurance purchases that will save you premium dollars. Self insuring is that principle. The smart insurance shopper eventually grasps the concept of self insurance. The whole idea around self insurance is using deductible options and eliminating unnecessary coverage. The days of the $100 Collision deductible on auto insurance is fading fast and it should. The higher deductible saves you in premium dollars. That is what we call self insuring. When you change your deductible from $100 to $500 you are taking on the risk for the first $500 of physical damage.

You will save a ton of money in the long run. You don’t have enough claims over a lifetime to warrant having a low deductible. You are paying the insurance company money for services they may never perform. You will save thousands of dollars by keeping your deductibles $500 or higher.

There are a lot of optional coverage’s in auto and homeowners insurance that you may want to eliminate to save money. Most states have tort options. Full tort verses limited tort can sometimes be a difference of 20% in your auto insurance premium. Rental reimbursement and towing benefits are added onto auto insurance all the time. You may want to self insure for these and save premium dollars as well.The insurance purchase can be easier and more affordable if you can grasp the mindset of self insuring.