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Raise Your Deductibles and Lower Your Premiums!
By admin | September 22, 2009
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Your automobile insurance policy deductibles might be costing more than you think. A small adjustment now may save you money over time. |
What is a deductible?
It is the $ amount you agree to pay out-of-pocket each time you cause an accident and make a claim under your collision coverage. The same applies to your comprehensive coverage. In short, your deductible is the predetermined amount the insurance company “deducts” from the total bill and you pay that amount. If the total damage comes to $8,000 and your deductible is $500, you would pay $500 and the insurance company would pay the remaining balance of $7,500. In another example, if the total damage is $350 and your deductible is still $500, you would be responsible for paying the $500. This part sucks!
Choosing the Best Deductible for You is easy.
Get with your auto insurance agency, and ask them to draw out all of your options. Once you see them on the table, then you can weigh the odds, and bump your deductible up and your monthly, quarterly, yearly insurance payments down.
If you are involved in an automobile accident, your collision coverage will pay for the damage to your vehicle; that is, after you pay your deductible for that accident. The comprehensive portion of your insurance provides coverage for damage to your car caused from events other than accidents. For example, a rock cracking your windshield on the highway or a branch falling on your parked car, would be covered through your comprehensive coverage. It is not necessary to apply the same deductible to both your collision and comprehensive coverage. The cost to repair the damage caused by a “collision” is potentially much greater than the non-collision events. You might be able to lower your insurance costs by raising the deductible on your collision coverage and taking advantage of discounts offered by your insurance carrier. So, make the decision about your deductible amounts for collision and comprehensive coverage separately. This is the key to savings!
Over the years, I have realized that many of us tend to choose the lowest deductible possible, not realizing we could be saving a considerable amount of money each year if we accept a higher deductible. One word of caution here; if you won’t be able to manage the larger deductible payment, if and when an accident happens, it doesn’t make sense to raise your deductible amount. Another factor to consider is your driving record. If you have a history of accidents, you’ll want to plan ahead based on those past trends.
Compare the numbers then choose a deductible wisely, you can always up it or down it at anytime, so try it out and see if you don’t save over all.
Topics: Automotive | 1 Comment »
October 8th, 2009 at 5:07 am
[...] Raise insurance deductibles. Assuming you have an emergency fund in place, raise deductibles on insurance policies. The [...]