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Since we are all looking to spend less money and make more of it, here’s a financial loophole for individuals that we would like to share from author David Pogue’s Book ‘Pogue’s Basics: Money‘. 

Financial Loophole: Insurance

You may be wondering “How can I, as an individual, find a loophole in my insurance?! That’s crazy! It sounds like it might be illegal and furthermore, how will my insurance company let me get away with that?”

Well, all valid questions and the answer to all of them is DEDUCTIBLES.

Choosing a high deductible is the way you can insure yourself and save thousands. The higher your deductible is, the less you pay for insurance premiums each month. See, if we really think about, when it comes to our policies, we pay and pay but never get anything substantial in return.

And because we never get anything substantial in return, it might suffice to say that we’ll probably never need our insurance. Now the reason people don’t do this is that we are terrified of large deductibles.

Car Repair Loan

We worry that in the chance of a disaster we won’t have enough money to be able to afford such a large chunk of change. But here’s the solution:

  • Open up a new savings account and deposit enough money in to be able to match your deductible.

Where will the money come from?

  • The money that we would have paid each month for the more expensive premiums become the contributions we make to our savings account. So, basically, instead of paying the insurance company we are paying ourselves.

Plus, if that disaster never happens the money is yours to keep and if it does happen, you have enough to pay the deductible. Win, Win.


Now, this may go against our risk aversion, but it is honestly way less risky than paying expensive premiums each and every month. This is because if we do the calculations, we have more chances to save than we have chances of disasters or accidents.

So try to think long-term and watch your savings account pile up with money every year or two.

Written by JOHN SELVEY

My thirst for knowledge, love for business and finance, along with my lifelong enthusiasm for writing and computer science pushed me into furthering my education through courses on business finance, personal finance, digital strategy, and web development. In addition to my educational pursuits, I have spent 10+ years in customer service with 2 of those years spent in the banking industry. In 2015 I became a father for the first time. And since, I have been dedicated to building a strong foundation for my family and community by pursuing my passions and utilizing my extensive background in customer service to start a small web production business with my wife.


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