Car Insurance Deductibles
When you own a car, it is import is important that you get insurance from a trusted auto insurance provider. You need to get collision coverage as well as comprehensive coverage. You can also go for additional specialty coverage. The coverage offered and premium rate offered varies somewhat for different companies. You can also look for various discount offers or promotional offers provided by companies. You have to do a little research work to find the best option that suits you. Now, let’s get more information about car insurance deductibles how they work.
What is deductible?
When you decide to purchase car insurance, you have to make a decision on the amount of deductible. You might not understand what ‘deductible’ means. You might even have heard about it but don’t have an idea about how to decide what deductible you should go for.
A car insurance deductible is the amount of money you will be paying for repairing of your car before your insurance company covers the remaining amount. For example, your deductible is $500 and if your car meets an accident that causes $2,500 worth of damage, you will have to pay $500 towards repair and the remaining $2,000 will be paid by the insurance company.
You might have heard that it is likely to lower your car insurance premium if you pay high deductibles. It is very important that you choose a deductible that is affordable to you.
While deciding your car insurance deductible, you think about how much you can pay that won’t cause a lot of financial stress to you in life. You consider factors such as your income, your household budget, personal savings and your available credit. If you have limited finance, it is recommended that you don’t choose high deductible. Otherwise it may happen that you won’t be able to get your car repaired as you don’t have enough money to pay for the deductible as your insurance company will pay only after you have paid the deductible.
The higher a deductible is the lower is your insurance rates as in that case you assume more risk on your own. It is recommended that you choose to have auto insurance deductibles for collision coverage, comprehensive coverage and personal injury protection (PIP).
Why do you need auto insurance?
According to a survey made, it has been revealed that a car accident happens every 18 seconds in the United States. There is always a risk associated with driving a car and nobody knows what is going to happen in the future. Even if you drive safe and don’t make a mistake, the other party’s fault can cause an accident. Or some natural calamity might occur and your vehicle is damaged or there are personal injuries.
Auto insurance is a safety net. Auto insurance from a reliable insurance company help you pay for the damage caused and will save you from financial stress.
In most of the US States it is mandatory for auto drivers to have minimum coverage insurance. You have to find out minimum coverage required for the State you are residing in. It is better you have more coverage to protect you to a greater extent.
It is important that you get yourself familiarize with certain policy related terms such as ‘premium’, deductibles, liability coverage etc. An insurance premium is the certain amount of money you will be paying at specified time as charges for the policy.
If you are responsible for an accident or for damage to other vehicles, your insurer will provide for the cost of repairs to the vehicle, legal fees and medical expenses for those who suffered injuries. You will also be provided coverage for the costs incurred if your car got stolen or vandalized.
Types of Auto Insurance Coverage
Auto insurance policy includes different coverage and accordingly you will have to pay premium. Auto Insurance may provide following coverage:
Bodily Injury Liability Coverage
In this coverage, if an accident occurs, it covers for medical bills, emergency room visits, ambulance charge etc. You will also get paid for legal and court fees.
Property Damage Liability Coverage
If an accident occurs and you at the fault, then cost to repair for the damage done to other person’s vehicle are covered by this type of coverage. It also covers repair cost of anything you hit with such as street lamp, building, fencing etc.
This type of coverage pays for the damage done to your car if your vehicle collides with another car. The insurer will pay only after you have paid for your deductible.
This provides coverage for losses due to any hazards such as theft, flood, vandalism, fire, earthquake, storm etc.
Uninsured or underinsured motorist Coverage
This type of coverage provides protection to you and other passengers if injuries happen in an accident by motorist who was uninsured and is responsible for the accident. You will be paid for the medical and other related expenses up to coverage limit specified.
Get Car Insurance Quote
Most of the insurance provider provides you online quotes. It is very easy to get quotes. Usually you have to choose your state and provide some basic information and you will get the quote. You can even buy insurance policy online. You can make comparisons between quotes from different companies. Different insurance companies have their own policies and premium rates, most of the companies offer discounts and some promotions offers to new customers as an incentive.
If you are to purchase auto insurance, you understand how deductible works and all the coverage options in the first place. Then choose an insurance provider that suits you the best. It is recommended that if you have a long record of safe driving and you live in a low risk area, you can go for high deductible as it will reduce your premium. If you live in a high accident prone area, then you can go for low deductible.
I think now you can better understand how does car insurance deductible work?