Car Insurance Deductibles – Key Questions
Car insurance deductibles are all about risk and who will bear the brunt of it. Obviously,
the smaller the accident the less the insurance must pay out. However when you have an
accident and the cost of repairs is say $3000, and your deductible is $1000, the insurance
company is only covering the remaining $2000. Because you are shouldering the
responsibility for the first $1000, the insurance company is in a better position. They
will therefore drop your premium accordingly. The more of that deductible you are willing
to pay, the less risk the insurance company is exposed to. But remember it also means you
are exposed to greater risk yourself.
Car Insurance Deductibles
Car Insurance Deductibles – Considerations
Consider the following…
Do you have money to cover the damage?
If you have an accident, do you have the extra money to fix your car and make it drivable?
Safety is the first consideration. If your car is damaged and it affects it’s drivable
safety, you must fix it. Do you have the money to repair the damage? If not, you may need
to lower the deductible just so you have transportation in the case of an accident.
Are you concerned about the looks of your car?
If you have an accident and cannot pay for the repairs, are you happy to drive your car
with some damage to the body? If not, then you need to go with a lower deductible. If you
have the money to repair it, then you can possibly handle a higher deductible.
Are you generally a safe driver?
This is all about shouldering the risk for repairing the car in the event of an acccident.
If you are a safe driver with no, or at least few accidents? If so, you may be able to
raise your deductible and not have anything to worry about. However remember, not all
accidents will be caused by you alone. There are other drives on the road that can cause an
accident and you can be left holding the bill. So when considering your car insurance
deductibles, you need to calculate the possibility of another driver causing the accident.
Can you save money?
If you are going to save money on your premiums by raising your deductible, it is a wise
thing to set that initial savings aside so if an accident happens you are able to make the
repairs without any damage to your cash flow. If you have trouble saving your money, then
raising your deductibles may not be the very best choice for you at this time.
Car Insurance Deductibles is Ultimately Your Call
Car insurance deductibles, like car insurance are all about risk and reward. At Allentown
Auto Insurance we are concerned that you get the coverage you need at a price you can
afford. But we also want you to be safe on the road. You may want to check out our other questions and answers as well.
The insurance company is making money by charging you for your insurance. If you had enough
cash on hand you could theoretially cover your own damage and save money. The same
philosophy is in play when figuring what car insurance deductibles to carry.
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