 Deductibles are a specified amount of money that the policyholder is required to pay in case of a comprehensive and collision "comp & collision" claim, which covers the insured vehicle in case of physical damage as a result of collisions, fire, theft, vandalism and more. The deductible is preselected at the point of purchase and can be changed midterm as long as no losses have occurred. Deductibles only apply to comp and collision coverage and not to "liability only" policies. When it comes to theft, deductibles are deducted from the total payout.
Example
A policyholder accidently hits a pole while backing up, damaging the rear bumper. In order to get the vehicle's damages repaired, the policyholder must pay the applicable deductible and the insurance company will cover the rest.
Choosing Deductibles
 Learn more about choosing auto insurance deductibles to help make an educated decision. It's important to understand how different deductible amounts can affect policyholders financially when it comes to paying premium and also in the event of a claim.
A high deductible will save a policyholder money in insurance premiums; however, it will be a higher amount that would have to be paid in case of claims. In the other hand, a low deductible will be more costly as far as premium goes; however, it will equate to a lower amount that would have to be paid during a claim.
A popular piece of advice for lowering rates is to raise insurance deductibles; however, keep in mind that it may not always be a good choice. For example, it wouldn't make sense to have a high ded. on a vehicle valued at $1000. This would cancel out the benefits of physical damage coverage. |