Some insurance agencies are enticing customers by offering “vanishing deductibles” on car insurance policies. Purportedly meant to encourage safe driving, the plans take, say, $100 off customers’ deductibles for each year they don’t file a claim. For example, if a customer’s deductible starts off at $500 and five years pass without a claim being filed, the deductible vanishes completely and the customer doesn’t have to pay anything when he finally files a claim.
This seems like a sweet deal, but as Money Q&A notes, you’ll have to crunch the numbers to make sure the offer makes sense. Insurers often tack on nominal amounts to premiums — say, $60 a year — that may end up eating into your actual savings, especially if you become so obsessed wiuth making your deductible vanish that you refuse to file claims to cover major expenses.
You can bet that since the vanishing deductible was dreamed up by the insurance industry, the odds are stacked against you that you’ll come out ahead if you opt to try it out.