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By: Ramu Garuda October. 25, 2018

Gavop analyzed the net savings from home insurance between higher and lower deductible plans in St. Joseph, Missouri, using a hypothetical claim amount. The higher deductible value is $2,500 and the lower value is $500. The study shows that for an insurance claim of $2,500, homeowners save $1,920 in total yearly expenditure by choosing the lower deductible insurance plan instead of the higher deductible one. In the lower deductible plan, the median yearly premium paid by citizens is $500 and the total yearly expenditure is $1,000. For the higher deductible plan, these values are $420 and $2,920.

The Gavop study also includes an analysis of home insurance premiums for locations within a 50-mile radius of St. Joseph. For the same hypothetical claim amount of $2,500, the residents of St Joseph and Gower report identical savings of $1,920 by choosing the lower deductible plan with the above-mentioned median premiums and yearly expenditure. In Gower, homeowners pay a median premium of $480 and incur a yearly expenditure of $980 for the lower deductible plan. For the higher deductible plan, these values are $400 and $2,900.

For the hypothetical claim amount of $1,500, the residents of Camden save $940, while in North Kansas City, residents save $900 by choosing the lower deductible plan.

Camden’s homeowners pay a yearly premium of $440 and a total yearly amount of $940 for a $500 deductible plan. In the higher deductible plan of $2,500, the yearly premium is $380 and the total yearly amount is $1,880. In North Kansas City, on the other hand, for a $500 deductible plan, the yearly premium is $560 and the total yearly expenditure is $1,060. For the $2,500 deductible plan, these numbers are $460 and $1,960.

The following table calculates the net savings from home insurance for the two deductible plans against a hypothetical claim amount for 10 locations within a 50-mile radius of St. Joseph, Missouri.

Low Deductible ($500) High Deductible ($2,500)
Place Example Claim Amount Yearly Premium Total Yearly Cost Yearly Premium Total Yearly Cost Net Savings for High Deductible Plans
Missouri$100$560$660$460$560$100
Buchanan County, MO$1,500$440$940$380$1,880-$940
St. Joseph, MO$2,500$500$1,000$420$2,920-$1,920
Gower, MO$2,500$480$980$400$2,900-$1,920
Camden, MO$1,500$440$940$380$1,880-$940
North Kansas City, MO$1,500$560$1,060$460$1,960-$900
Liberty, MO$1,000$820$1,320$700$1,700-$380
Pickering, MO$1,000$210$710$170$1,170-$460
Wolf River, KS$500$220$720$180$680$40
Hickory, MO$500$470$970$400$900$70
Amazonia, MO$400$290$690$240$640$50
Corning, MO$400$80$480$70$470$10
Preston, NE$100$350$450$290$390$60
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ABOUT THE AUTHOR

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Ramu Garuda

Ramu is a research analyst with over 7 years of analytics & research experience. Prior to joining the company, he worked with some of the prominent consulting and market research firms in India, including Pride Technology (Supporting consulting projects to PWC), RR Donnelly, and The Hackett Group. His skills include company profiling, benchmarking, data and trend analysis, industry analysis, and report writing across the industries. Ramu holds a Master’s degree in Finance and Marketing. He also has a bachelor’s degree in Biotechnology.

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