What’s the Difference Between a High and Low Car Insurance Deductible?

Wednesday, May 16, 2018

It can be confusing to understand the difference in car insurance deductibles, so for starters, let’s talk about what a deductible is.  An insurance deductible is what you pay out of your pocket when you file a claim. Think of it as insurance for your insurance company. For instance, if you have a high deductible you must meet before your insurance kicks in, you may opt to pay a lesser amount and be done with it, rather than cough up the higher deductible amount. Deductibles are a way of balancing the risk.

There are a few things to consider before deciding to go with a high or a low car insurance deductible. Things like your driving record, the state of your finances, and the cost of your insurance premium can all influence the decision.

The parts of your car insurance policy regarding damage to your property is where deductibles come into play. That refers to comprehensive and collision coverage.  If you have only liability coverage, there is no deductible.  As an example, that means if you bump into someone else in the parking lot, your insurance will pay for all the cost up to your coverage limits of repairs needed on the other driver’s car.

Low Car Insurance Deductible

If you’re on a limited budget, a low deductible might be your best option. You may be able to find $250, however $500 is the lowest that most companies will do. Remember also, your monthly premium will cost more if you choose a low deductible.

If you are leasing or financing your car, you can choose a deductible that is $500, or less if you can. If you’re driving an older car, it might be a good idea to choose liability only and have no deductible. If you’re still uncertain, talk with your friendly independent insurance agent.

High Car Insurance Deductible

A lower monthly premium is the most common reason for choosing a high car insurance deductible. Higher deductibles can save as much as 15 to 50 percent on monthly premiums, but remember these are estimates and these saving only apply to policies for collision and comprehensive coverage.

To make sure you are making the best decision for your circumstances, speak with your independent insurance agent. Because they are independent, they can shop around for you and find the absolute best price available for your car insurance needs.


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