December 31, 2011

Managing Deductibles To Get Cheap Car Insurance Coverage

Auto insurance, much like every other insurance in this country, has been increasingly getting more expensive. There are many reasons for the increase in costs, but the fact remains that policies are getting pricey while coverage is staying the same. Because of the rising costs, some individuals or families have been moving to basic coverage or getting liability only in order to cut costs. But it's important to know state laws regarding basic coverage before making that move. It's also important to understand what coverage is best for you and/or your family so that you can ensure that you're covered completely in case of an emergency. There are ways to get cheap car insurance even in this economy. One of the best and easiest ways to get cheap car insurance without sacrificing coverage is through the control of the car insurance deductible.

While the car insurance deductible may not be a person's first thought when considering how to lower insurance costs; it should be. The fact is that insurance agents tend to try and pump up the reasons for getting a low deductible. They may show an individual a bunch of statistics on how many car accidents there are in the country or even in the state. They may also show how much a car accident, regardless of fault, can actually cost a policy holder. All of this is done to simply get a customer to lower their deductible.

But a lower deductible can often result in inflated auto insurance policies. A low deductible like $250 or even $500 means that if an accident does occur, that is the amount a person is to pay before the insurance kicks in. It is actually a high risk move for the insurance company which is why they make those policies more expensive for consumers. There's a higher chance that the insurance company will have to pay out on a claim. It also means that you'll have to pay less out of pocket when an accident does happen.

The alternative is to increase the deductible, even if it's only a bit, such as to $750. The little increase in deductible can mean a big decrease in the monthly premium. Sure, it also means that an individual will have to pay more out of pocket during an accident, but safe drivers can relish in the fact that they will not likely have to make a claim. Increasing the deductible amount will help lower the monthly bill because the policy holder is less of a risk for them and they know they'll have to pay out less on any given claim. So increase that deductible to save.