For any insurance policy, the deductible is the amount of money the policyholder must pay out of pocket before the coverage kicks in. By choosing higher deductibles, consumers can significantly lower their premiums, which makes it critical for drivers to find the perfect balance between what they can afford to pay when submitting a claim and what they can afford to pay on a monthly or annual basis. Here’s what you need to know about deductibles for comprehensive car insurance, brought to you by Altra Insurance Services, a premier provider of auto, homeowners, renters, and business insurance San Diego residents trust for reliable, affordable coverage.
What Function Does a Deductible Serve?
Deductibles are one way insurance companies are able to mitigate the risks they’re taking on by insuring numerous drivers. From a driver’s standpoint, this up-front money makes it possible to pay less for premiums overall, so less money is spent if the policy is never used. As a driver, the larger your deductible is, the more risk you’re taking on. For many motorists, deductibles as high as $1,000 can eventually pose problems.
How Could Your Deductible Affect You in the Event of an Accident?
If you choose a $1,000 deductible and get into an accident that leaves you with $1,500 in damages, you’ll pay $1,000 up front. Your insurance company will only cover the remaining $500. More importantly, because accidents can happen at any time, you’ll always need to have your deductible money readily available.
When Do Deductibles Need to Be Paid?
A comprehensive car insurance deductible is paid when an accident happens. If this is money owed to the other driver in an accident, you’ll want to pay this right away. When a claim of your own is paid out, the amount of your deductible will be subtracted from this money. Choosing a deductible that’s too high can obviously leave you in a bind.
How Should You Choose the Right Deductible Amount?
Comprehensive car insurance deductibles range from just $100 to more than $2,000. The choices for deductible amounts differ according to the guidelines of individual insurance companies and the laws of each state. The higher you set your deductible when buying your policy, the less you’ll wind up paying in premiums overall. As such, an increase in your deductible amount from $200 to $500 may save you as much as 30 percent on your annual premiums. Choosing a higher deductible for greater savings works out best if you never get into an accident, which means you never have to pay your deductible. However, ultimately you always need to make sure you have sufficient cash at your disposal for covering this unexpected expense if and when it ever arises.
When they need affordable, reliable auto insurance, San Diego drivers turn to Altra Insurance Services. For high-quality coverage and outstanding service, reach out to one of our friendly representatives today at 619-474-6666 to learn how you can save money on your car insurance.