Six Things To Know About Your Auto Insurance Deductible

One of the most important things you need to understand when you take out an auto insurance policy is how deductibles work. The following are six things you need to know about your auto insurance deductible. 

You'll have to pay out more if you file a claim if you have a higher deductible

The deductible on an auto insurance policy is the amount you have to pay upfront before your auto insurance coverage will kick in. The deductible amount must be paid out of pocket. A higher deductible amount means that an accident and resulting claim will be more expensive for you. 

Higher deductibles generally mean lower premiums

Policyholders choose higher deductible policies in order to save money on their premiums. The premium costs are generally lower for a high deductible policy. Insurance providers consider that they'll make up for the lower premiums when a claim is filed and the deductible portion of the resulting costs is paid by the policyholder. 

It's important that you're able to pay your deductible

Those taking out an auto insurance policy need to make sure that the deductible amount is low enough that they'll have funds available to pay it should they need to file a claim. If a policyholder can't afford to pay their deductible, they could have trouble affording the necessary repairs.

Deductible amounts can differ between comprehensive and collision coverage

It's important to read the fine print when evaluating the deductible on a policy. On some policies, the deductible amounts can differ depending on whether a claim is filed under the policy's collision coverage or comprehensive coverage. 

High deductibles are good if you feel your chances of filing a claim are low

You'll get the best deal on a high deductible policy if you don't end up filing any claims. This way, you'll pay lower premiums without having to pay any high deductibles. If you think you're unlikely to get in an accident that requires you to file a claim, opting for a high deductible policy may be a good idea. 

There is no deductible on only liability coverage policies

Collision and comprehensive auto insurance coverage are generally subject to a deductible. However, it's important to note that there is no deductible on liability coverage. The insurance provider pays the full amount up to the policy maximums for damages the policyholder causes to other parties in an accident. 

Call an insurance agent to learn more.