Car Insurance Deductibles

What are car insurance deductibles?

car insurance deductibles

There are many factors to look into when you’re shopping for car insurance. While comparing different car insurance policies, not only do you need to weigh out all the coverages included in each policy but also the premium cost and your deductible.

Car insurance deductibles are the amount you pay out of pocket while you file for a claim for vehicle repairs or a replacement after an accident.

 Furthermore, it’s quite important to factor this charge because you could end up paying for the deductible in your policy at any given moment so it’s good to include your deductible in your expenses.

In addition, it could actually have an impact on how much money you pay on your insurance premiums and the car insurance deductibles amount is typically discussed with your insurance agent. 

How Do car insurance deductibles work?

What type of car insurance deductibles are there?

In your insurance policy package there are many different types of coverage included.

It is possible to have liability coverage only. Liability pays for the other person’s injuries and damages if you’re at fault in the accident. You do not need to set a deductible for liability coverage.

If you are looking for coverages beyond the state minimum that will help pay for expenses even if you are found at fault, you can add on additional coverages such as comprehension, collision, personal injury protection, and uninsured motorist property damage exist to assist paying injuries to the passengers in the vehicle and also damages to your vehicle itself.

These types of coverage typically require deductibles or have an option to add on a deductible to reduce the cost of coverage. Here are the different type of  coverages that have the option to add a deductible or include a deductible:

Collison: When you pay for this coverage, this part of your policy mainly covers damages made to your vehicle resulting from an impact with an object such as a telephone pole, guard rail, mailbox, or building when you are at fault.

However, collision coverage will not pay for the wear and tear on your vehicle or if the mechanics of your vehicle fail. It will on the other hand, pay for the damages from potholes or from rolling your vehicle.       

image shows pics like medical, calculator and money depicting an insurance claim

Comprehensive: Comprehensive, on the other hand, pays for and provides security against theft and damage to your automobile caused by an accident non-related to a collision such as fires, floods, vandalism, hail, falling objects such as rocks and trees, and certain hazards such as animals.

Uninsured/underinsured motorist property damage: This type of coverage protects you from drivers who are uninsured, or one without enough coverage to completely pay for your vehicle’s damage, or in other cases where the situation is a hit and run.

This particular type of coverage is not required in all states and must be added on as an extra. However, there are at least 22 states that require uninsured motorist coverage and will have a state- mandated deductible amount.

Personal injury protection: Depending on where you live, personal injury protection might be required. This particular coverage pays for medical expenses for not only yourself, but also for your passengers in your automobile.

This also covers and helps pay for expenses related to lost wages.

Factors to consider with car insurance deductibles

How to make the best decision for you.

There are many different options to make a deductible more accessible to you. As you shopping finding out which policy and deductible work best for you there are key aspects to remember:

Questions you may have are as followed:

Would you rather pay less for car insurance or repairs?

Typically if you want to lower your insurance premium you would have to apply for a higher deductible rate, however you would have to pay a higher pay out of pocket rate once you have to file a claim for an accident. 

There are also times when the claims you file will have to paid the entire full out of pocket amount. In addition, If you opt for a lower deductible, it could still be likely higher, but you have a much lesser payout when filling a claim. 

Furthermore, paying for a higher insurance rate with a low deductible could end up with you not filing a claim but that comes with a risk.

When do you pay for your car insurance deductibles?

The time you pay for your deductible is usually when you file a claim under your insurance policy in your claims, indicating that the damage made to your car by an accident will be covered and cost more than your deductible amount. Furthermore, if your claim is accepted your deductible will most likely be applied to your claim when your insurance company issues your payout rate.

 When this happens you are not in charge of writing over a check or trying to issue a payment to your insurance company. The insurance company will just automatically subtract that amount from your claims approved payout.

How much can you afford to pay out of pocket?

Before you even decide on a car deductible it is very important to keep in mind what is affordable for you in case of an accident. 

For example, if you are paying and the amount is $500, you are better off not paying for a deductible higher than 500.

 If you do unfortunately you will run the risk of possibly not being able to pay for your deductible for your vehicle if you are in an accident

Does your lender have a car insurance deductibles requirement?

In any case where your vehicle is either financed or leased, it is good to have comprehensive and collision coverages for your automobile and if you make that the decision it would be best to obtain deductibles for each.

 In addition there are some instances where some of the lenders offer a maximum deductible that you are allowed to carry. Therefore, it is good to speak with financial institutions and agents on what restrictions there are.

Are car insurance deductibles required?

In what situation is a car insurance deductible not needed?

When getting car insurance it is important to always keep finances available to pay for your deductibles as well but in some cases having car insurance deductibles aren’t always needed:

             Some cases where it is not needed is listed below

  • When you are in an accident and are the primary cause but no damage is actually done to your automobile you would not have to pay for a deductible. In this particular situation , your liability insurance would actually pay for the other drivers injuries and their property damages. 
  • In other cases some insurers offer a disappearing deductible that typically lowers your set amount for each violation which is also claim free.
  • Lastly, the other time where you do not have to pay for a deductible is when you are not at fault in the accident. Their insurance company will most likely pay for your damages if you file them.

Overall, looking into car insurance deductibles can be mentally exhausting finding out  as to what deductibles are necessary and helpful to have and which ones are not needed. When you finally make the decision it’s great to realize that car insurance deductibles help yourself and your automobile if you are in an accident and helps cover damage cost. Car insurance deductibles are here to protect you, your passengers, and your automobile  in the long run! All the agents are here to help you find the best solution for you!

car insurance deductibles

Last Updated on by Alexis Karapiperis

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