Undertanding Deductibles For Your Car Insurance

What would you do if you got into a car accident tomorrow? Are you prepared to pay for the damages yourself, or would you need to rely on your insurance agency? Understanding your car insurance deductible is a crucial part of being prepared for the unexpected. In this article, Stanton Insurance will explain what a deductible is and how it can influence the cost of your insurance.

Key Takeaways:

For auto insurance, deductibles determine how much money a driver must pay if their cover ever has any damages or is in an accident. 

1. A deductible is the amount of money the driver must pay out-of-pocket before the insurance agency will cover the rest. 
2. There are two types of insurance that typically have deductibles built into them comprehensive and collision. 
3. A driver’s deductible affects how much their premium will be for their car insurance.

 What Is A Deductible?

When a driver files an insurance claim, they pay a deductible “out of pocket.” The phrase “out of pocket” is a term for the amount of money drivers agree to pay before their insurance coverage kicks in and covers the remaining cost of the claim. 

An easy way to think about this is if a deductible is $500, and repairs on the vehicle will cost $2,000 the individual will be responsible for paying the deductible of $500 out-of-pocket, and the insurance company will cover the remaining $1,500. In summary, deductibles are the amount of money a driver must pay first when filing a claim for damages or a car accident. 

What Two Types Of Coverages Have Deductibles?

The two most common types of auto insurance that have deductibles are comprehensive and collision. 

1. Comprehensive insurance protects drivers from non-collision events that they cannot control. This can include vandalism, theft, fire, animal strikes, severe weather, tree limbs falling, and windshield and glass damage. 
2. Collision insurance protects a driver if they get into a collision with another vehicle or an object.

In addition, some drivers may also have deductibles for personal injury protection and uninsured/underinsured motorist property damage. 

How Does A Deductible Affect the Premium?

A driver’s deductible is a big factor in determining how expensive their monthly premium will be for their vehicle. When drivers buy car insurance, they can choose their deductible amount. The higher the deductible amount the lower the premium will be for insurance. How are the two related? A higher deductible means a driver is willing to pay more upfront in case of an accident, so their insurance agency will not have to cover as much. 

On the other hand, if a driver has a low deductible, their premium amount will be  higher. Since drivers won’t be paying as much out of pocket if they have an accident, they are expected to pay more on their premiums. Finally, drivers should also remember that how much they are willing to pay for their deductible will affect their car insurance quote. Determining the price of the deductible can be a difficult task for drivers, and that’s why they should always feel free to ask their insurance agency for help

At Stanton Insurance, we believe in providing our clients with the answers to their questions. It’s for this reason that we’re committed to finding you the best policy for your individual needs. We’ll work with you until you’re satisfied with the results. So call us now to learn more about how we can help you. Our number is (309)734-2171.