It goes without saying that car insurance deductibles are one of the most confusing or overlooked parts of any policy out there. With all the different auto insurance companies and policies, they provide to you, knowing what type of deductibles are associated with them, how they affect your monthly insurance premiums, how much your deductible would cost you are things you need to know before finalizing your insurance policy. Being the most misunderstood part of all insurance policies, it really important for a customer to find out what car insurance deductible is right for them and implications will happen when it is time to use it.
In short, an car insurance deductible is the amount of money you are required to pay out of pocket before your insurance coverage comes into effect. Although depending on the type of insurance you have each may require a different deductible amount to be paid upfront. This typically applies to all auto insurance coverage except liability insurance policies.
When you select your insurance coverage you will have different amounts of you would have to choose from, some being more expensive and some being less expensive depending on what car insurance deductible you choose it could increase or even decrease your monthly insurance premium.
Now that you understand what an car insurance deductible is, when you get into an accident there may be times where you have to pay out of pocket and where you may not. Although there could be an instance where you are not required to pay anything out of pocket. We can break this down for a better understanding of which scenarios can happen and when they should apply for you.
Generally, when someone is in an accident there are three types of claims made:
At Fault Claims
o If you are in an accident and it is deemed your fault, in order for your insurance company to cover the damages to your vehicle you will need to pay 100% of your deductible up front before your insurance company pays for the excess damages to your vehicle.
o If you are in an accident and it has been deemed a partial fault accident, the amount you pay for your deductible can be subjective to the insurance company you are with and how much of a deductible you are required to pay out. Based on the company policies when you are in this scenario you may be required to pay half or part of your deductible or the full deductible upfront. Make sure that you have cleared up this situation with your insurance company.
Not at Fault Insurance:
o If you are in an accident where you have been deemed not at fault, more than likely you will not be required to pay any amount of your deductible to cover that damages of your car.
Suppose you are in an accident and you have accumulated damages of $130, a broken headlight to be exact and labor is included. Your insurance company requires a deductible of $100 to start an open claim and make sure your vehicle has been attended to. In reality, does it make sense to have an insurance company open a claim so you can be reimbursed the extra $30? Most times no. Simply because of the amount of time it will take for them to come to a final conclusion. As well as, the costs involved by the insurance company to have your vehicle fixed may actually cost more than the $30 you are seeking.
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These are the three scenarios where you will find yourself in a situation where you might need to use your car insurance deductible to cover the damages of your vehicle, depending on which deductible you have chosen it could be a larger sum than others. Typically, the range for most insurance companies your car insurance deductible can be between $500 to over $1000 all depending on what you feel most comfortable with.
Of course, the significance of an accident can vary depending on many factors speed, size of the vehicle and even the overall durability. So relying on your insurance company to pay for damages may not always be the route you may take.
What you need to consider most when selecting an insurance deductible for you is how it will impact you financially. You will need to weigh the pros and cons of each level for a deductible and select the most reasonable coverage that can leave you comfortable in both situations. The worst case scenario would be left with a high deductible you would have to pay to have your vehicle repaired. Like most customers, they would prefer to save as much money as they can since the majority of the population calculate budgets on a monthly basis and have emergency funds set aside. Do not overlook the benefits of a deductible that requires you to pay a bit more per month and save a bit on the upfront cost. This is simply because if you are driving every day the chances of something happening on the road where one type of insurance policy may come in to affect you could either be in a graceful position where you can afford to pay the upfront amount or in a disheartening one where you may not be able to. Our recommendation would be to budget carefully and ensure that you do your research before deciding on any of the deductibles you are presented with. Shop around with all the different insurance companies in the space and see what auto insurance deductible best fits your budget and requirements.