What is a Car Insurance Deductible?
A deductible is the amount that you pay before the insurance provider pays on a claim. The higher the deductible the lower the premium, meaning you help share the risk with the car insurance company. Insurance companies believe that if a driver is sharing part of the risk with the insurance companies, it is likely that they will be a safer driver and will reduce the likelihood of accidents resulting in lessor auto insurance claims.
Choosing a Deductible Amount
When choosing a deductible amount, it is very important that you choose the highest amount that you can afford. This means that your choice of deductible amount will depend on your willingness and your ability to pay that amount in case of an accident. If you are unsure of what deductible amount to choose, you can always ask for assistance from your auto insurance agent to help you decide.
The Physical Damage
The most common type of coverage that can be used with deductible is the physical Damage Coverage, better known as comprehensive and collision coverage. This type of coverage protects your vehicle from any damage whether you are found at fault or not. Usually, if you are financing your car, you will be required by the lien holder to purchase collision and comprehensive coverage to protect their collateral. The usual deductible amount available are $250 – $1000, meaning you have to pay the deductible amount that you opted. So it is very important to predetermine what you can afford to pay in case you have to file a claim
The Benefits
If you are a good driver, with clean driving record, getting a deductible is a good idea. Basically, if you get high deductible, it will drastically lower your car insurance rate. This is a fact that not all policyholders know. The rule is, the higher the deductible, the lower your car insurance premium will be. So choose wisely.
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