Choosing the Best Auto Insurance Deductible
Company Trusted For Over 25+ Years*
Company Trusted For Over 25+ Years*
Adjusting your auto insurance deductible is something that you have complete control over when you buy coverage. The important thing to remember is there are consequences in doing so and it might cost you if you are not prepared. One of the best benefits about getting a higher deductible is you might be able to get more coverage for less. If you are on a tight budget but still need quality protection, this might be your best choice. Let’s go over some policy basics, so you can choose the best auto insurance deductible that works for your budget. Get the lowest premium possible with Rodney D Young Insurance and save more with direct online rates.
An automobile deductible is the amount you pay “out of pocket” when you file an insurance claim before your insurer kicks in and pays the rest up and to your policy limit. So let’s illustrate this with a simple example. If you have a low $500 deductible and get into a collision that causes $3,500 in damages, this is how the process would unfold.
* You would be responsible for the initial $500
* The insurer would then pay for the $3,000 balance of the claim
If you had a higher amount, like $1,000, then your carrier would pay $2,500 in this example. Your required payout of $1,000 would be double, which is a lot of money for most people.
Car Insurance Deductibles and Premiums
If you are looking at getting covered for less, then you might want to consider raising your deductible to $1,000 or more. Doing so can reduce the cost of insurance by 15% or more and allow many on a tight budget to afford comprehensive coverage. Policy price differences can vary quite a bit between the lowest and highest amounts, so you should shop around with companies like Rodney Young insurance.
If you are looking at the lowest deductible amount of $250, you might end up paying more than $200 in monthly premiums.
On the other hand, the same exact policy with a $1,000 deductible might be only $120 monthly. You can see the huge price difference and why it is so important to make a good decision before you purchase a policy.
If you get into an accident and have a $250 deductible, you will end up not having to come up with much money prior to your coverage kicking in. On the other hand, if you have a $1,000 deductible, you are responsible to pay this prior to your insurer paying anything. Some people are just not good drivers and like having a lower amount, even though their premiums are set a lot higher.
The good news for excellent drivers is setting your deductible higher is not only smart but can save you a lot of money. If you have never filed a claim or been in an at-fault accident, then this route makes the most sense. Go with $750 to $1,000 and get your premiums lowered as much as possible. Remember, insurers invest the premium money they get, so it only makes sense that you save it and invest it yourself.
Here are a few other things to consider when choosing your deductible amount.
Nearly half of all American’s do not even have $1,000 saved in the bank. If you get a higher deductible of $1,000, you need to have it set aside and not spend it in case a claim is filed.
* Are you a safe driver that avoids accidents?
Let’s face it, some people are better drivers than others. If you have never been involved in an accident and consider yourself a super good driver, maybe you should opt for a deductible of $750 or higher. On the other hand, if you find yourself crashing into cars every couple of years and have little or no savings, you might want to get a lower deductible.
* How many miles do you drive monthly?
If you only drive 1,000 or less each month, then you are far less likely to get into an accident than others who drive a lot more. Think about the pizza delivery guy or an Uber driver that is on the road all the time. They are much more likely to get into a crash. If you don’t drive much, consider getting a higher deductible.
Remember that you decide the deductible amount for your policy. You are in control and should make a decision that is best for your unique situation. Now that you have an idea of the policy amounts you need let RodneyDYoung insurance save you money. Get your free online quote in about 5 minutes and get cheaper car insurance today.