Auto insurance is compulsory to legally drive a car to prove your financial responsibility. There are a number of coverage options in your policy. The deductible you choose is one option that can make your policy different from others. The deductible in auto insurance is the amount you pay first when you make a claim before the insurance company pays the rest for the damages caused in an accident. When you opt for collision and comprehensive coverage, you will have to choose a deductible and have the equivalent amount of funds always available.
The costs of some vehicle repairs
The cost of removing a dent from your fender will be around $700. This deductible is paid for every accident. So it should be understood that this amount is to be paid out of pocket or with your deductible. This money must be at your disposal as it is paid first before your policy comes into effect.One more point to remember is that the insurance company will eventually increase your premium as a result of being in an accident. There fore even if you have a higher deductible your premium may not be as low as you expect it to be. In such circumstances it is wise to choose a deductible that is affordable and it also keeps your premium rate low. You can set your budget accordingly with a fair amount for your deductible that would be in the right balance with your auto insurance cost.
How it works
If you want to keep your monthly premiums low, you can choose a higher deductible. This is to take care of any expenses resulting from your claim. You should have enough savings to meet such expenses in the event of a vehicle accident and you make a claim on your auto insurance. For example if you had chosen a deductible of $500 and get into an accident and the total cost of damages is $3000, you will pay the $500 deductible first and then your insurer will pay the remaining $2500. If you had chosen $1000 as deductible, you would save much on your monthly premiums. It is therefore important to calculate and determine the deductible that you can afford.
You can do the mathematics and find out the right amount that will be right for you. This amount should be readily available when you need it. So it is better to choose a higher deductible and put away the savings from your premium to build a sizable amount which you can later on decide to have it available as your deductible if you have to make a claim. You insurance agent will be able to help you in determining the right amount of deductible for your auto insurance.
Ways to have a lower deductible and still get a cheap car insurance
- You can cleverly get a lower premium by way of your clean driving history availing the good driver benefit and low probability of an accident and then go for a lower deductible.
- You may also choose yearly or half yearly payment for further reduction in your premium rate and go for a lower deductible.
- Keep your car in a safe garage and this will reduce the chances of a claim for theft.