Understanding Car Insurance Deductibles
When you purchase car insurance, one of the decisions you will need to make is on the amount of your deductible. But what is a deductible?
A car insurance deductible is the amount of money you have to pay toward repairs before your insurance covers the rest.. For example, if you’re in an accident that causes $3,000 worth of damage to your car and your deductible is $500, you will only have to pay $500 toward the repair. The insurance company pays the remaining $2,500.
For many people, increasing the amount of their deductible is also a great way to save money. That’s because when you choose a higher car insurance deductible amount,, it could lower the amount you pay on your insurance premium.
However, it’s important to choose a deductible that you can afford. Imagine not being able to get your car fixed because you don’t have money to cover the deductible.
When choosing your car insurance deductible, think about how much you can pay without causing a lot of stress in your life? Consider your income, your household budget, your personal savings, and your available credit.
Understanding how deductibles work and knowing what you can afford is important to getting the right coverage at the right price.
Learn more about Auto Insurance 101 and how to consider your lifestyle and goals for Getting the Right Coverage.
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