Auto Insurance Deductible is the portion of loss that you are responsible for in the case of a car accident. If your deductible is, let’s say $1,000, it means that if you were to submit a claim for $5,000, you would be responsible for paying $1,000 and the insurer for the remaining $4,000.
Insurance Tip related to Auto Insurance Deductible
The lower the deductible you choose, the higher your car insurance premiums will be, since the amount that you’re risking to pay is lower. There are also often options to fully eliminate deductibles altogether, but we suggest you choose a deductible that you know you will be comfortable paying out of pocket in the case of an auto insurance claim, without putting a financial burden on your family. Typically, the more driving experience you have, the higher you can go on deductibles since you are less likely to get into an accident.
Another thing to consider is that it is sometimes not worth reporting minor claims since:
- You will still have to pay the deductible (which may be higher than cost of repairs)
- Your auto insurance premiums may go up in the future since your insurance company might start seeing you as an increased risk
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