What is a Car Insurance Deductible?
What is a car insurance deductible? Car insurance deductible generally is the money that you pay up-front for an accident or some kind of claim. When you file a claim against your policy, you will likely pay out-of-pocket the deductible. You might also see high deductibles for covers such as personal injury protection, collision, comprehensive, and medical coverage. However, keep in mind that these deductibles can increase over time, so be sure to look carefully at the quote you receive and ask questions.
Why is car insurance deductible important? Well, the higher your deductible is, the lower your monthly premium payments will be. The reason being is that if you do have an accident or make a claim, you will be required to pay that deductible amount before the insurance company will pay your claim.
So how does this affect you? If you are driving a vehicle that costs more than $10,000, then the higher your car insurance premiums will be. For the same cost, you could get much cheaper insurance. In addition, you will receive discounts on the type of car you drive, your age, the area in which you reside, your marital status, and more. These discounts will be applied to your insurance premium.
When should you consider raising your deductible? You should consider raising your deductible if you have an older car, have multiple cars on a policy, or live in a no-fault state. On the other hand, raising your deductible too much can cause you to drop your car insurance altogether. This is why you must watch your bills very closely.
Should you choose a high deductible but not go over it? This can be tricky. If you choose a high deductible but you do not make claims in a certain period of time, you may end up paying a lot more. However, if you never make any claims, your car insurance premiums may actually decrease.
What is a deductible in liability insurance? Liability deductible means that you will have to pay a certain amount for repairs or medical bills if you get into an accident. This is in addition to the damages, you will have to cover for your car. Raising your deductible can help you save money, but only if you have chosen a high deductible. Therefore, you should always check with your insurance agent to make sure you are not making a mistake when choosing this amount.
How is your car valued by the insurance company before you raise your deductible? Raising your deductible will not change the value of your car because your premium will still be the same. However, the company will be willing to drop your premium if you are not going to make claims for a certain amount of time. Therefore, if you do not plan on driving very far from home, your insurance premium will not increase when you increase your deductible.
When you have finally decided what is car insurance deductible, you can begin shopping for discounts from your insurance company. There may be several different discounts available, so it is best to check with many different companies. Discounts will allow you to save money on your monthly premium and this can allow you to afford to drive even more expensively!
Your deductible will not affect your auto insurance coverage if you have an excellent driving record. However, you will pay more for your premium if you have numerous speeding tickets or accidents on your record. Also, if you have a high deductible, it will be easier to increase your deductible in the future. Therefore, if you are looking to save money, be sure to avoid adding your deductible to your policy until you are sure you will not need to increase your deductible in the future. Then you will not have to worry about future premium hikes.
Raising your deductible will also allow you to save money if you do not use your coverage often. If you do not use your insurance very much, you can raise your deductible and save money in the process. Therefore, if you are planning to buy a new car very soon and do not drive very much, be sure to increase your deductible. This will allow you to purchase that new car at a much lower price. In addition, if your current car is financed, you will find that you will be able to deduct your deductible from the loan if you want to purchase a new car and pay off the loan.
So, what is a car insurance deductible? Basically, it is a small amount of money that you agree to pay for car insurance should an accident occur. Of course, most drivers do not agree to pay this small amount of money up front. Therefore, they will add their deductible to the cost of their premium. Then, when they need to file a claim, they will only have to pay the deductible, saving money in the process.