Most people like to ask a lot of questions when buying an auto insurance policy. They ask about the coverage types and amounts, and they might ask about additional forms of coverage they can add. When you buy auto insurance, you might also want to inquire about the deductible on the policy. The deductible is an essential part of an auto insurance plan, and here are some of the ways the deductible can affect you.
You Must Pay It After Some Accidents
The deductible you choose for your policy is the amount of money you must pay after an accident in certain situations. You would not pay this amount if someone caused an accident that left you injured and your vehicle damaged. In this event, the person who caused the accident will be responsible for paying your bills. You should not have any expenses to pay out of your pocket if you are not responsible for the accident.
You would have to pay the deductible if you caused the collision and have damage to your vehicle. To get your car fixed, you will pay this amount before the insurance company pays the rest of the claim.
The Amount You Choose Could Affect Your Premiums
The second thing to understand about deductibles is the effects they can have on your premiums. Your premium is the amount you pay for your policy. Most insurance companies calculate this in terms of six months of coverage. Choosing a higher deductible will result in saving money on your policy. Choosing a lower deductible will result in paying more for your premiums.
Tips for Choosing Your Deductible
There are two things you should consider when selecting the deductible amount for your policy. The first thing to consider is how much can you afford if you wreck your car? Would it be difficult to pay a $1,000 deductible? If so, you might want to consider a lower one.
The other thing to consider is how much you want to spend on your car insurance premiums each month. If your main goal is to cut your monthly expenses, you can do this by selecting a higher deductible. If you do not mind paying a little more each month, you might be better off choosing a lower amount for your deductible.
If you have questions about car insurance, you can call an insurance agent to learn more about your options, costs, and coverage types.