Deductibles With Car Insurance: 4 Things to Know

Insurance can be a confusing subject, yet it is an essential part of life for most people. Car insurance is one of the most common insurance products you can purchase, and your plan might come with a deductible. Do you know what this is and how it works? Here are four things to help you learn more about deductibles with car insurance.

What It Is

The first thing for you to understand is what a deductible is with insurance. Your insurance plan covers your vehicle if you get in accidents. But if you cause an accident, you might have to pay a deductible. Your deductible is the predetermined amount of money you must pay when you file a claim with your insurance company. If they approve the claim, they will pay the rest, but you must pay your amount first.

Your Options

When you buy car insurance and choose collision and comprehensive coverages, your agent will ask you about your desired deductible. You can choose one as low as $250, but you can also choose higher ones, such as $1,000.

The Effects of Your Deductible

The deductible you select affects you in two ways. First, it affects your rates. If you are primarily concerned with having affordable car insurance coverage, you may want to choose a high deductible, such as $1,000. Lower deductibles with policies cost more money, while higher deductibles result in lower premiums.

The second effect of your deductible is the amount you must spend if you file a claim. With a low deductible, you will not have to spend a lot if you file a claim and need repairs. With a higher deductible, you will pay more out of your pocket when this occurs.

How to Choose the Right One

Choosing the right deductible is vital when buying car insurance, and you can choose yours by considering several things. First, what are the cost differences between a low deductible and a higher one? Secondly, how much can you comfortably afford to spend if you get in an accident and need repairs? When you consider these things, you can choose a deductible that you feel comfortable having.

A deductible is a common part of an auto insurance policy. If you need auto insurance, you will need to know these things about deductibles. If you would like to request a free quote for car insurance coverage, contact an insurance agent today.