Choosing an Auto Insurance Deductible

An auto insurance deductible is the amount of money that an insured individual agrees to pay out of his or her pocket when filing an insurance claim. For example, a policy with a $250.00 deductible would mean that if a claim for $1000.00 were filed, the insured would pay $250.00 and the insurance company would pay the $750.00 balance. Most insurance companies offer deductibles ranging from $200.00-$2500.00. When choosing a deductible consumers need to consider price, automobile, and driving conditions.

When choosing a deductible level, premium amounts should be considered. A lower deductible amount equals a higher premium. Individuals who are on a limited budget may have to choose a higher deductible in order to afford their insurance premiums.

Although price is important, it is not the only factor in choosing a deductible. Drivers should carefully review the automobile they are insuring. By researching the vehicle, consumers can learn the average cost of repairing damage in an accident. Determining the cost associated with repairing front, rear, and side collision damage will give consumers an idea of what it will cost if their car is involved in an accident. Drivers that own cars that are more expensive to repair may choose a lower deductible. In cases where an automobile is older, it may not be worth carrying full coverage. Because, an insurance company will not invest more money to fix a car than it is worth, older automobiles are often times better candidates for liability insurance only.

Driving patterns are an important factor to be considered when choosing a deductible level. There are several conditions that increase the chances of an accident occuring. Living in an area that regularly experiences inclement weather such as ice and heavy snowfall may make accidents more common. Also those that live in dangerous terrain, such as mountains, are more likely to be in accidents as well as those that regularly drive in extremely heavy traffic. It may be a wise choice to choose a lower deductible if the odds of an accident are higher.

Choosing the right deductible should be a well thought out process. If individuals review their budgets, research their automobile, and study their driving patterns they will be able to make an educated decision that will be financially beneficial to them.