What are car insurance deductibles?

Car insurance coverage can be easy to understand but many drivers simply assume they are fully covered with no extra expense. This is a very big mistake and one that can prove to be quite costly so understanding the details of your auto insurance policy is very important.

“Car insurance deductibles are one of the few variables a driver can manipulate to get better car insurance rates “

Deductibles play a large factor in auto insurance however understating what a car insurance deducible is will be critical to deciding whether or not to secure a policy with a low deducible or high one.

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What is a car insurance deductible?

Choosing a car insurance deductible will have a direct impact on your auto insurance premiums. The deducible defines how much money you agree to pay out of pocket for certain covered incidents.

For example, let’s assume you have a $25,000 comprehensive car insurance policy with a $500 deductible. In the event of an accident you will be responsible for paying the first $500 of damage (under uninsured events) and once the $500 is paid then the car insurance company will pay the remaining cost, up to the limits of your policy coverage. If the total damage is $5,000 you will pay $500 and the car insurance company will pay $4,500.

Car insurance deductibles apply to almost all components of car insurance policies including comprehensive, collision and GAP insurance coverage but sometimes in the event of a total loss its possible to have a policy with a feature where the deductible is waived.

Most car insurance companies offer policies with deductibles ranging from $250 to $1,000 and usually the higher car insurance deductible you choose the lower your car insurance premiums will be.

Should I always pick the highest car insurance deductible?

No. Remember that a car insurance deductible is an out-of-pocket cost and drivers should only choose a deductible which they can afford in the event of an accident. Car accidents are usually unforeseen events and you should have the ability to pay this deductible at any given time since you never know when a car accident will happen. Should you fail to pay the deductible its very possible your car will not be released by the repair shop and/or repairs fully completed until the bill is paid in full.

What Car Insurance companies offer the Best Car Insurance Deductibles?

Almost all car insurance companies offer policies using the same deductible formula however some companies will waive a deducible in the event a car is determined to be a total loss or if you use an auto repair shop on their approved list. This will vary from one car insurance company to the next so make sure to ask any potential providers about the unique ways they offer customers to avoid paying a deducible in the case of an accident.

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