January 15, 2010

Why Auto Insurance Deductibles Tend To Be Overlooked – But Shouldn’t Be

There are quite a few factors to consider when looking online for an auto insurance quote. Unfortunately, some of the more important factors are ignored or overlooked by the vast majority of consumers. One of these factors – auto insurance deductibles – is usually not the main concern of motorists. Instead, these drivers focus on finding decent coverage and a low rate. From a very basic standpoint, this isn’t a terrible strategy. However, when trying to get sufficient car insurance coverage to protect oneself in the event of an accident, deductibles can’t be ignored. They’re a vital part of your insurance policy, and should be considered carefully every time you look for new or updated coverage. Deductibles are one of the most important options that you have control over when it comes to your policy.

As you’re probably aware, your car insurance deductible is the amount of money you’ll pay on a claim before your coverage kicks in. For example, let’s say you’re in an accident with a neighbor that’s your fault and you cause $6,000 worth of damage. If your deductible was $500, your car insurance company will pay you $5500 on the claim. What many drivers fail to consider is that deductibles for different types of coverage aren’t necessarily the same, and your auto insurance rate is greatly affected by your deductible amount. The higher your deductible, the lower your premiums will probably be. Deductibles are not necessarily directly linked to the amount of coverage you buy.

The best strategy when deciding on your deductible in each area is to consider what you could afford in the worst-case scenario. After all, the point of insurance is to plan for accidents. Your insurance coverage won’t do you a lot of good if you can’t cover the cost of your deductible, so shoot for a cost that’s low enough to be potentially affordable. Keep in mind that in the event of an accident, you’ll likely have quite a few other costs – especially if you have to stay home from work to recuperate. While this means that you’ll be paying more than the absolute minimum for your auto insurance coverage, you’ll be much safer in the event of the unexpected. On the other hand, if your deductible is lower than it needs to be, there’s a good chance that you can save money by raising it.

In order to find your deductible, take a look at your auto insurance contract. Look at each area that a deductible is listed. Taking an educated approach to auto insurance deductibles is certainly a good idea, and whether or not it saves you money, you’ll be much more aware of the insurance that you’re paying for.