The deductible you pay for your car insurance is one factor that puts you in control of what you pay for the premium. Put simply – your car insurance rate.
It’s important to note that deductibles are more complicated than you may think. Before choosing a deductible amount, it’s important to think about your personal situation and what you can afford to pay out of your own pocket if an accident occurs.
The Insurance Deductible Defined
Your insurance deductible is what you pay after filing an insurance claim. An example would be if you back into a fence. You must cover the deductible before your insurance coverage kicks in when you file an insurance claim. The deductible is separate from the rate you pay for your insurance.
Car Insurance vs. Health Insurance Deductibles
If you have health insurance, you probably know what a deductible is. However, car insurance deductibles are slightly different. For health insurance, your deductible is for the year. However, the deductible applies with insurance each time you file a claim.
Determining the Amount of Your Car Insurance Deductible
The deductible impacts what you pay for your insurance. It is also called the premium. You can choose this for your coverage. The hardest part about this is knowing what amount to choose and what best works with your situation.
If you choose to have a higher deductible, your auto insurance rate will be much lower. However, with a lower deductible, you will have a higher insurance rate but pay less every time you are in an accident before the insurance takes over.
It’s also worth noting that when you choose your deductible, it doesn’t mean you can’t ever change it. It’s possible to contact your insurance company and change it. Just remember, some providers will charge you for making changes, so ask about this first.
When Are Deductibles Needed?
With deductibles for your vehicle, they are required for certain types of coverage. The most common coverage that requires a deductible include:
- Uninsured or underinsured motorist coverage
- Collision coverage
- Comprehensive coverage
Each type of coverage carries its own deductible. If you only purchase what is required, usually this is liability coverage; you don’t have to worry about the deductible.
When Do Deductibles Not Apply to Your Situation?
There are several situations when no deductible is required. These include:
- You file a claim for glass repair
- The other driver is at fault for the accident
- You file a liability claim
Getting the Right Deductible for Your Car Insurance
As you can see from the information above, there are several factors you must consider when it comes to choosing your car insurance deductible. Be sure to keep the information above in mind, which will help ensure you get adequate coverage and that you can afford the deductible you choose. If you aren’t sure what is right for you, work with the professionals who can help you get the coverage you need.