When you purchase car insurance you often have the choice to choose how much of a deductible you would like. The problem is, many people do not clearly understand what a deductible is.
In order to solve this, we figured we would explain what exactly a deductible is in depth, so you can make sure you get the right car insurance and pay a fair amount for it.
To explain it as simple as it can be explained, a deductible is the amount you pay out of pocket before your insurance company takes over and covers the bill. It is common for deductibles to range from $100 to $1000 dollars. There are many schools of thought on how high your deductible should be, but the fact of the matter is, you need to choose the deductible that fits you and your driving record.
Why choose a low deductible?
A low deductible means you only pay a small amount if something happens to your car and you need your insurance company to jump in. For example, let’s say you get in a car crash and are told to fix your car it will cost $10,000. If you happen to have a $100 deductible, you only have to pay $100 of the $10,000. Not to shabby.
Bu there are some draw backs, low deductibles often come with a higher monthly premium. So each month you will have a higher amount to pay to your insurance company. Overtime, it may add up.
Why have a high deductible?
If you happen to be a safe driver and rarely need your insurance company’s help, a higher deductible may be right for you. You will have a discounted rate each month but you will have to pay a larger chunk of your fee if you do get into in accident.
Both options provide you with advantages and disadvantages. It is up to you to decide which one fits your driving style and record on the road. Just make sure that you are insured and you buckle up when you get in the car.
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