Reduce Your Car Insurance Deductible
Insurance deductibles are the amount you as the policyholder agree to pay in certain situations before your insurance policy will kick in cover your costs. In car insurance, there are two common coverages that have deductibles:
- Collision covers the damage to your car if you are in an at-fault accident
- Comprehensive covers the damage to your car for things such as hail damage or vandalism
What are Typical Deductible Amounts?
When you sign up for a car insurance policy your company should offer you several options on the amount of your deductibles. The most common deductibles for comprehensive and collision car insurance coverage are $100, $250, $500, and $1,000. Many people will choose to carry lower deductibles on comprehensive coverage than collision coverage, because comprehensive covers occurrences that are more out of their control. Also, it usually costs less to decrease the deductible for comprehensive coverage than it does for collision coverage.
How do I decide what my deductible should be?
When you decide what you want to set your deductible at, keep in mind how much you can afford to pay if something happens. If you have to file a claim, your insurance company will take the amount of the deductible out of the payment. For example, if your car is vandalized and the auto body shop gives you an estimate of $1,000 to have it repaired but you have a $250 deductible, your insurance company will only pay $750 to have your car fixed. You will have to pay the $250 deductible.
What are the benefits of having a lower deductible?
Many people choose carry a lower deductible because they can’t afford to pay a larger amount of money if something happens to their car. A $1,000 deductible will keep the cost of your car insurance lower because the insurance company will pay less if there is a claim, but if you can’t afford to pay $1,000 if you are in an at-fault accident, you should consider carrying a lower deductible. Coming up with $500 can be much easier than $1,000 at a time when you might not have the money available.
What other options do I have for decreasing my car insurance deductible?
Many auto insurance companies offer different programs to lower the size of your deductible. In some states, insurance companies offer full glass coverage, which means if your window or windshield is broken, you wouldn’t need to pay any deductible – your insurance company would cover the entire cost of the repair. Some insurance companies also offer free windshield repair so if the glass can be repaired instead of replaced, such as for a small chip in the windshield, you would not need to pay anything.
Another program offered by some car insurance companies is a vanishing deductible. This is an option that will reduce your deductible by a set amount every period when you don’t have a claim. For example, the company may offer to reduce your collision deductible by $50 every six months if you don’t have an accident. Ask your insurance company if this is an extra cost, because sometimes it can cost more than $50 every six months for this coverage, and you would be better off saving $50 every six months in your own savings account in case you have an accident.
