May 23, 2011

How Car Insurance Deductibles Help To Keep Rates Low

Car insurance deductibles can be frustrating and discouraging on the part of the consumer, but they play a very important part in keeping car insurance rates low. Without a deductible, rates would be much more expensive, penalizing good drivers, and making insurance more expensive for everyone. Deductibles help maintain low car insurance rates by encouraging safe driving, reducing the insurer's overall cost in the case of an accident, and making small repairs the responsibility of the car's owner. Car insurance is not designed to fully cover the cost of car mishaps. It is an insurance policy to protect you from costs that would cause significant harm to your budget. You can often set your car insurance deductible to be in line with your budget, however, a lower deductible will raise your monthly car insurance premium.

Car insurance deductibles keep rates low by encouraging drivers to drive safely and carefully. Because drivers maintain a portion of the responsibility for car repairs in the case of an accident, it adds motivation to avoid accidents, door dings, windshield damage, and other mishaps that translate into car insurance claims. It can add a motivation to park in the garage if there is a storm coming, or to walk a little farther to protect the vehicle from damage. This helps everyone be a little more careful, helps prevent car insurance claims, and helps to keep rates low for everyone.

Deductibles also encourage low car insurance rates by making it the driver's responsibility to cover minor repairs. Car insurance is not intended to be a fix for every little incident that might scratch or damage your vehicle. The purpose of insurance is to protect you financially in the case of a major accident or expense. By excluding the small expenses that a car owner can take care of without much difficulty car insurers help to keep their costs down, which helps car insurance premiums remain lower for everyone.

Car insurance deductibles also help to maintain lower car insurance rates by shifting some of the costs in the case of a major accident onto the driver. The driver is responsible for the amount of the deductible, and the insurer covers the remaining medical and repair costs. This system protects the driver from catastrophic financial consequences, while reducing overall costs for the auto insurer. By reducing the overall cost for the insurer in the case of an accident, the insurer's costs are reduced, allowing them to charge lower premiums.

Deductibles serve an important role in keeping the cost of car insurance affordable for everyone. There are options available to reduce your deductible, but a lower deductible often means a higher car insurance quote.