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Year In Review

Why examining your deductibles may lead to significant deductions.

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When's the last time you looked over your company'sinsurance policies? You should review your deductibles annually,advises Tricia O'Connor, CPA and president of Total ServiceAccounting, a Denver accounting firm that also provides businessconsulting.

O'Connor estimates that 95 percent of her clients aren'tfamiliar with their insurance deductibles or don't know howthey can affect the cost of their insurance policies until sheshows them how they can save money by paying more attention."Most clients never ask about deductibles and end up withwhatever the agent thinks is appropriate," says O'Connor."The trouble is, your agent isn't necessarily interestedin saving you money on your premiums."

You can think of insurance as a disaster safety net, rather thana way to protect yourself from minor inconveniences, saysO'Connor. For example, your auto insurance should be reservedfor when a car in your fleet is totaled, not for when you lose aheadlight in a parking lot accident. Health insurance should beused to protect you from the cost of catastrophic illnesses, notcommon colds. Be sure to adjust your deductibles accordingly.

Invest part of your premiums savings into an `insurance'fund that can cover deductibles from the interest it earns, andyou'll save on premiums, incurring no added expenses frompaying deductibles out-of-pocket.

Contact Source

Total Service Accounting, (303)778-8386, toconnor@mho.net

Claire Tristram is a business and technology writer in SanJose, California.

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