Do you keep high or low deductibles on your rentals?

8 Replies

I've gone back and forth on this and am trying to decide which makes more sense.  Seems if something broke under $1,000, I may not want to claim it and i may benefit from pushing my deductible up for the things like roof, etc that doesn't happen very often, especially for homes I own that have new or relatively new roofs.

What are your thoughts?  How do you manage this for your rentals?

My deductible is $2,500. I am not going to file a claim for anything less than that, so might as well save some money on my premium!

My deductible is also $2,500 but I only have 1 rental so far.  It just didn't make sense to me based on what I would possibly make a claim for.  My personal residence, same thing, after I had a new roof on it, and siding was in good shape.  Now that I know that, the $2,500 deductible just is what it is.  If something smaller than that happens, I have reserves to cover that (personally plus for the rental), if something never happens then eventually reserves will be more than necessary and I'll use that to buy the net one.

I own one property.... what do I know? Ha! Lots to learn. Thankful for this community.

Originally posted by @Mitch Brunette :

My deductible is also $2,500 but I only have 1 rental so far.  It just didn't make sense to me based on what I would possibly make a claim for.  My personal residence, same thing, after I had a new roof on it, and siding was in good shape.  Now that I know that, the $2,500 deductible just is what it is.  If something smaller than that happens, I have reserves to cover that (personally plus for the rental), if something never happens then eventually reserves will be more than necessary and I'll use that to buy the net one.

I own one property.... what do I know? Ha! Lots to learn. Thankful for this community.

 Thanks for your thoughts and congratulations on starting your journey

If you are properly budgeting for capex you are self-insuring and will not likely file claims for small issues. In that case keep the deductible high to lower your premiums.

I have rentals with a 2500 deductible and the other is 500.

I probably prefer the 2500 deductible as my payments are very very cheap, around 40-45 a month.

As high as possible. Insurance is only used in catastrophic situations. Not for small damages

I keep mine high    

It keeps the premiums lower.  If i do make a claim with a lower premium, all my other premiums will go up because of it, so its just not worth it for smaller claims, therefore I keep deductibles high.

Glad to hear the consensus is similar, and the comment about using Capex properly. I do set aside Capex in advance and monthly, and it never really clicked that it goes hand in hand then with a higher deductible. Boom, thanks.

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