Understanding Auto Insurance Deductibles 

Understanding auto insurance deductibles is crucial and helps you know what to expect in the event of an accident. A deductible is the money you’ll pay toward an applicable covered claim.

For instance, if your deductible is $500 and your vehicle costs $2,500 to repair following an accident, you’ll pay the first $500, and your insurance company may cover the remainder.

Deductible Types

An auto insurance policy typically includes deductibles for physical damage to your vehicle, namely for collision and comprehensive coverages. However, depending on your policy, you may have other coverage inclusions that have a deductible attached, such as:

• Collision deductible: This may apply if your vehicle incurs damage from a collision with another vehicle or an object.
• Comprehensive deductible: This can pertain to non-collision damages like theft, vandalism or acts of nature.

Importantly, not all claims have a deductible associated with them. For liability claims (i.e., damage caused to others), insurance may cover them immediately. However, be sure to review your policy to understand exactly how deductibles may relate to your selected coverage.

Selecting the Appropriate Deductible

You typically have the option of choosing a deductible amount when picking a policy. Deciding which auto insurance deductible is right for you depends on several factors, including the following:

• Your budget and savings—The deductible you select may directly influence the premiums you’re charged. If you choose a high deductible, your monthly premiums may be lower. However, you’ll need enough savings to cover the deductible if an accident occurs. Conversely, a lower deductible may mean higher monthly premiums, but you’ll pay less out-of-pocket if you need to claim. Assessing your budget and savings is essential in choosing a deductible that you can comfortably afford.
• Your risk of accidents—If you’re a safe driver and rarely get into accidents, you might consider choosing a higher deductible. This is because the likelihood of you filing a claim is low, so you can benefit from lower monthly premiums. However, a lower deductible might be better if you frequently drive in high-traffic areas or have a history of accidents.
• Your vehicle’s value—Your vehicle’s type and value are also factors to consider.

Auto Insurance in Kokomo, IN

Deductibles can influence your insurance premiums and the amount you pay out of pocket in the event of an accident. However, by understanding the factors influencing deductibles, you can make an informed decision, helping to ensure financial security and providing peace of mind.

Contact Crume-Evans Insurance today to review your auto insurance coverage.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.