March 4, 2012

Why Drivers Should Pay Attention To Deductibles When Buying Automobile Insurance

Adjusting a car insurance deductible is the easiest way to control the cost of annual automobile insurance premiums. It's imperative that drivers select an appropriate deductible that is easily affordable in a worst case scenario. Whether it's $100 or $1,000, a car insurance deductible affects the cost of collision and comprehensive coverage. Car insurance deductibles are beneficial tools that policyholders tailor to their individual needs and means.

Increasing a car insurance deductible lowers annual automobile insurance premiums, but it comes with a price. If policyholders need to file a claim, they are responsible for covering the cost of their deductible before their insurance is applied. Before adjusting car insurance deductibles, policyholders should consider their monthly income, expenses, available savings, credit and driving record. Drivers who have a clean record and a high level of savings can safely lower their car insurance deductibles and reduce their premiums. On the other hand, drivers with a history of frequent claims including vandalism, theft and vehicular damage, should be careful when adjusting their car insurance deductibles.

Lowering a car insurance deductible means higher automobile insurance premiums and lower out-of-pocket costs if a claim is filed. Reducing a car insurance deductible is advisable if a driver filed claims in the past or owns a vehicle that is subject to high rates of theft or vandalism. By lowering a car insurance deductible, insurance companies cover a greater portion of claims and their expenses increase, which results in higher premiums. However, low deductibles are helpful for many drivers, especially those who don't have significant savings or have filed a number of claims in the past.

The primary danger is selecting a car insurance deductible that is too expensive. If policyholders cannot afford the deductible they select, it could mean repairs or replacement arrangements are delayed until the deductible is satisfied. By selecting a higher deductible, safe drivers with clean records enjoy lower premiums. Insurance companies offer lower premiums on high-deductible coverage options because they may get out of paying for claims altogether or pay less per claim.

Adjustable deductibles are especially valuable for policyholders who are required to secure collision and comprehensive coverage because they are protecting leased or financed vehicles. In most cases, policyholders can select one deductible for their collision coverage and another deductible for their comprehensive coverage. This is beneficial if policyholders park in an unprotected area where vehicles are subject to vandalism. In this case, they could lower their comprehensive deductibles while maintaining higher collision deductibles that cover accidents with other cars and objects. Car insurance deductibles are one area where policyholders are totally in control of their automobile insurance costs. It pays to use this power wisely.