Do you really know what a deductible is?
What are Deductibles? What do I need to know?
As someone in the industry long gone are the days of not being VERY familiar with industry jargon. Which is why it seems alien when people are not familiar with the basic terminology we use daily. But that’s not your fault, its ours as an industry for not making you more familiar with what our coverage and terms actually are. Today we are going to cover auto deductibles. What they are, What you should be asking and what some difference are between one type of deductible (collision) and another (comprehensive) is. We will also consider when certain deductibles are more desirable then others! Of course as always you can click HERE for information about our auto polices or HERE To get a quote for any of your vehicles from us today!
Typically with auto insurance you have two different types of coverage with two separate deductibles. These are Collision (damage incurred during a car crash) and Comprehensive (damage not from a car crash. Like falling trees, theft, vandalism, etc…) This means that your insurance will cover the bill after the damage incurred reaches a certain dollar amount. Let’s say for example you are in a minor accident, no big deal just a paint scratch. You have a 1000 dollar collision deductible. If the shop quotes you 800 dollars then you are on the hook for the entire 800. If they quote you 1800 you will pay 1000 out of pocket and your insurance will cover the rest. Obviously a lower deductible is desirable. However there are multiple factors that go into actually making the decision. Also your deductible does not have to be the same between both coverages. Let’s take a moment to look into some things that may influence your decision when considering your auto deductible.
What does your savings or emergency fund look like? Obviously if spending a higher amount of money out of pocket will not hinder you as much in the long run perhaps a larger deductible is something that you can consider. On the flip side of that token if a chunk of money out of pocket would put you in a precarious position perhaps the extra cost monthly is worth it to ensure you are covered if anything does happen.
What is the value of your vehicle? Often if you have a newer, more costly vehicle it makes a bit more sense to carry a higher deductible. A newer vehicle is often more costly insure. So the savings month to month may be worth it. Especially when any damage incurred is likely to go over the deductible anyways. However if you own an older vehicle carrying a lower deductible may be smarter. It is certainly cheaper then carrying it on a newer vehicle and also the difference between the cost of the vehicle and the deductible ends up not being very much.
What is the difference in cost between high and low deductibles? Perhaps the difference in price is less than you may think, or maybe it’s more. The point here is you never know. So don’t be afraid to ask us when getting your AUTO QUOTE to check out what your monthly payment would be with a higher and lower deductible!
What is your risk? Perhaps most importantly you should always be realistic when answering what is your risk? How often do you drive? How far do you drive? Roads or freeways? Rush hour or low traffic times? What are your driving habits? Ensuring that you have properly ascertained a real assessment of your risk you should be able to make a good guess as to which deductible would be best for you.
While these are important they are only some of the major factors to consider when choosing an auto policy that is right for you. Remember if you shopping to go HERE to get a quote or reach out with any questions you may have!