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When purchasing car insurance, you will be asked what deductible you want for comprehensive and collision coverage. It’s important that you understand what a deductible is and how it can affect your policy rate. Here we give you 5 things you should know about your deductible.
1. Your Insurance Won’t Pay Anything Until You Pay Your Deductible
If you assume your car insurance company will pay for any and all damages to your car, you’re wrong. Your deductible is the amount you must pay before your car insurance company starts paying on the remainder of the repair cost. So if your repair expenses are $3000 and your deductible is $500, you have to pay that before your insurance will pay the remaining $2500.
2. The Higher Your Deductible, The Lower Your Premium
If you’re looking to save on car insurance, choose the highest deductible. Doing so will lower your car insurance premium substantially. However, be prepared to pay that high deductible if your car is damaged in an accident. Choosing a $1500 deductible doesn’t do you any good if you don’t have $1500 to pay when the time comes.
3. The Lower the Deductible, The Easier It Is to Pay
While choosing a lower deductible means your policy premium will be higher, it will be easier to pay $150 or $300 toward repairs versus $1500 or more. Choose the deductible that you can afford, or put the deductible amount away in savings so you’ll have it when you need it.
4. Both Comprehensive and Collision Require a Deductible
And they’re separate. If your car gets hit by a bear barreling across the road, you’ll pay one deductible for comprehensive coverage. If you get into a car accident the next day, you’ll pay a separate one.
5. If Your Car is Older, Choose a High Deductible or No Coverage
Most states don’t require you to carry comprehensive or collision coverage, though it’s a good idea if your car is newer. However, if your car is older, the value of the car may be less than what it would cost to repair it in the case of an accident. There is no point in paying for coverage if you will only have to consider it totaled and get a new one.
6. Your Deductible Will Cover Several Things
Collision coverage insures your car against just that: damage in a collision, while comprehensive coverage insures your car against many other things like:
• Fire
• Tornado
• Wind
• Hurricane
• Vandalism
• Animal hitting car
• Hail
• Theft
Every car insurance company is different and has different coverage for each, so check with yours to see what it will pay for, and when you will be responsible for paying your deductible.
Every car insurance company offers different deductibles, but most range from $150 to $1500. When you look at your policy, get quotes on the range of deductibles to see how much it can change your policy cost. And again, choose a deductible you can afford.
