Summary3 min read

The Ramsey Show Highlights

Episode: Unexpected Ways To Save On Car Insurance
Date: July 10, 2026
Host: Ramsey Network
Featured Expert: Dave Ramsey (implied from context and distinctive tone)

Episode Overview

This fast-paced episode centers on strategic tips for saving money on car insurance, specifically by manipulating deductibles and understanding when to raise or lower them. The hosts break down the math behind premium savings, provide actionable advice for listeners nearing the end of their car loan, and discuss the broader philosophy of treating insurance as protection against major risks, not minor inconveniences.

Key Discussion Points and Insights

1. Should You Lower Your Deductible After Paying Off Your Car?

Listener Question: A listener asks whether to lower the deductible (thus increasing premiums) or save that deductible amount after fully paying off their car, as a claim could drain their emergency fund.
Expert Advice:
- It's generally better to keep higher deductibles and maintain savings to cover them.
- Quote: “Anytime you can raise the deductible…and you have the money in your emergency fund to cover it, it’s going to drop your car insurance rates.” (00:33)

2. How to Evaluate Deductible Savings

Deductible Example Analysis:
- Difference between a $250 and $500 deductible, or a $500 and $1,000 deductible, can be significant depending on vehicle value.
- Key Point: Calculate whether the premium savings justify taking on more risk.
  - Formula: If increasing your deductible saves you enough in premiums to recoup the risk within about three years, it’s usually a good deal.
  - Quote: “If you can make your money, the risk money back…in about three years, you ought to break even on the increased risk.” (01:17)

3. Practical Deductible Ranges for Most Drivers

Advice: For cars valued at $30,000 or less, the “sweet spot” for deductibles is usually $500 to $1,000.
Quote: “Most of the time, the best deal on a $30,000 car and under is somewhere around a 500 or $1,000 deductible. Somewhere in there is what you’re looking for.” (02:15)

4. Insurance Principle: Protect Against Catastrophe, Not Minor Losses

Philosophy: Carry insurance only for situations that could severely impact your finances, not for trivial incidents.
- Quote: “Insurance should cover catastrophes, not hangnails. That’s what you’re looking for.” (02:50)
This principle applies to all kinds of insurance—auto, health, etc.

5. Emergency Fund Considerations

Guideline: Always ensure your emergency fund can cover the higher deductible before increasing it.
Quote: “As soon as you can keep your enough of your insurance, your emergency fund up there, you want to do that.” (04:00)

6. Application to Health Insurance

Parallel Advice: High-deductible health insurance saves on premiums for the same reason: you’re only insuring against big expenses.
- “Your premiums go way down on your health insurance when you do that, because you’re accepting the first five or seven or $10,000 worth of risk…What calls you bankrupt is 350,000 with a NICU stay…That’s the ones that break you.” (03:22)

Memorable Quotes

On Risk and Insurance:
“Insurance should cover catastrophes, not hangnails.” (02:50)
On Deductible Strategy:
“Almost every time you’re going to find that to work on, going from $250 to $500. So no, you don’t lower the deductible. We’re always trying to raise deductibles and raise the amount we have in savings to cover it, so we’re giving the insurance company less money.” (02:29)
On Financial Priorities:
“Take the savings on your premium, divide that into the additional risk...if that’s about a three-year risk pattern, it’s probably wise to take the higher deductible in that case.” (01:45)

Timestamps for Key Segments

[00:06] — Listener’s car insurance question
[00:33] — Why higher deductibles lower your premiums
[01:17] — How to analyze deductible savings
[02:15] — Best deductible range for common car values
[02:50] — Insurance should protect against catastrophes
[03:22] — Health insurance parallel advice
[04:00] — The importance of an emergency fund for deductibles

Tone and Style

The episode is direct, practical, and uses relatable analogies (“not hangnails”) to convey the importance of focusing on major risks. The host’s advice is rooted in the Ramsey method: use math, not emotion, and prioritize your emergency fund as a core part of any insurance strategy.

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Transcript3 lines

[00:03]
A
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[00:07]
B
I'm about to pay off my car and currently have full coverage. Once the car is paid off, should I lower the deductible, which would increase how much I pay every month, or save the deductible into a separate savings account? It would wipe out most of our emergency fund if I had to use it for car repairs. No, I think I would be just getting full coverage. I would keep the, keep the coverage.
[00:33]
A
And anytime you can raise the deductible, a larger deductible and you have the money in your emergency fund to cover it, it's going to drop your car insurance rates. Okay? And so the difference in a 250 and a 500 is huge. The difference in a 500 and 1000, depending on the price of the car, the value of the car is huge. And a way you can analyze it is this. Okay, if you go from $250 deductible to a $500 deductible, you're taking an additional $250 worth of risk. Divide that into the savings. And so if it saves you $25, then that's a year, that's 10 years. No, I wouldn't do that. If it saves you $250, then you made your money back in one year on the risk. So how much does this, does the premium, the insurance premium drop as you raise the risk you're taking? And compare those two. And if it's, you know, if it's, if you can make your money, the risk money back, even though you don't actually spend the money out unless you have a wreck, if you can make it back in about three years, you ought to break even on the increased risk in about three years. So like I've got expensive cars and I carry, I think it's a $10,000 deductible now, but these are expensive cars. And so I, but it drops my deductible, I mean, drops my premiums way down. Okay, so, but you know, so you just kind of got to look at that. And most of the time the best deal on a $30,000 car and under is somewhere around a 500 or $1,000 deductible. Somewhere in there is what you're looking for. And so just divide out the difference, the savings, Take the savings on your premium, divide that into the additional risk. And if that's about a three, about a three year risk pattern, you're probably, it's probably wise to take the higher deductible in that case. But almost every time you're going to find that to work on, going from 250 to 500. So no, you don't lower the deductible. We're always trying to raise deductibles and raise the amount we have in savings to cover it. So we're giving the insurance company less money. Insurance should cover catastrophes, not hangnails. That's what you're looking for. And so the more in anything you're doing, like if you can do a high deductible health insurance plan like an HSA plan, your premiums go way down on your health insurance when you do that, because you're accepting the first five or seven or $10,000 worth of risk on the health insurance. And five or $10,000 is not going to cause you to bankrupt on a medical bill. What calls you bankrupt is 350,000 with a NICU stay with a baby, or 350,000 with a heart bypass or a million or whatever it ends up. That's the ones that break you. So what you're covering is the big stuff on a car wreck, the big stuff on a health insurance, and the deductible is the little stuff. So as soon as you can keep your enough of your insurance, your emergency fund up there, you want to do that. Like Rachel said, create your free every dollar budget today. The simplest way to budget for your life.