Tips For Choosing the Right Car Insurance Deductible
Having auto insurance is required regardless of what state you live in. All drivers must prove that they have “financial responsibility” before they are legally allowed to have a car. In choosing a car insurance package, however, one of the options presented to drives is how much of a deductible they want. The deductible is the amount that you have to pay if you are in an accident and do damage to another person’s property. So for example, if your deductible is $1,000 and you’re in an accident in which you did $5,000 worth of damage, you are responsible for the first $1,000 and then your insurance company pays the other $4,000. Or in that same case, if you’ve chosen to have a $250 deductible, then you would only have to pay $250 and your insurance company would pay the remaining $4,750.
There are some things to consider when choosing the deductible you want, however:
Monthly cost — The lower your deductible is, the more you are going to have to pay for your insurance each month. A high deductible will probably be significantly less each month, but the trade-off is that if you are actually in an accident, you will have to pay that higher amount before your insurance starts covering damages. Do the math and figure out which will save you more in the long run.
Cost per accident — Remember that you must pay your deductible per claim. So if your get into multiple accidents you are going to have to pay your deductible each time. Make sure you can afford it in this worst case scenario.
Car model and year — Certain cars may have different deductible requirements than other cars. For example, brand new cars may differ from an older, classic car.
It might be a little boring, but it’s worth your time to figure out which deductible is best for you rather than just choosing the cheapest one because you never know when you’re going to need it.