Shopping for auto insurance is probably easier now than ever. You can get online at just about any auto insurance website and check out all your options, from comprehensive and roadside assistance coverage. One other thing you will be tasked with picking is what type of deductible you want with each type of auto insurance coverage you choose. Understanding deductibles can be a little intimidating without any experience, but a little guidance will get you a long way. Check out some of the common questions about deductibles for car insurance below and the answers you should know.
What are the advantages of choosing higher or lower deductibles?
Higher deductibles tend to help keep your car insurance rates low. For example, if you pick a higher deductible for bodily injury coverage, you would likely see your overall premium drop substantially. If you pick a lower deductible, of course, your insurance will be a little more expensive. The value of having a lower deductible later is if something happens, there will be less money that you will have to cover before your auto insurance actually picks up the tab. Opting for lower deductible amounts is always ideal, but it is often more feasible for auto insurance shoppers to go with high deductibles in exchange for lower premium rates.
What does it mean if car insurance offers a vanishing deductible?
Some insurance companies offer vanishing or disappearing deductibles. This can sound like an odd term at first, but it really is of value to the customer. Basically, a vanishing deductible is a deductible that grows less and less the longer you have your policy. Therefore, you can opt for a larger deductible to save money when you first get your policy, and as long as you are a committed, long-term customer who pays your premiums, your deductible can grow smaller.
Does your deductible have to be paid out of pocket after an accident?
The answer to this question will depend on the policy type that you have and the regulations of the state where you live. Even some insurance companies vary in how the deductible payment is handled after a car accident. In most situations, the insurance provider will subtract your deductible from the overall benefit amount. For example, if you have an accident and a claim yields you $4,000 in repair money and you have a $500 deductible, your claim payment will be reduced by $500.
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