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Choosing the Right Deductible for Your Car Insurance

Adjusting your deductible is a great way to guarantee you have the right car insurance coverage for your situation and can help you save money. However, choosing the lowest possible deductible is not always the best option and can end up costing you a great deal in the long run.

Here’s what you need to know about deductibles.

What is a Deductible?

A deductible is the amount you pay out-of-pocket before your insurance coverage kicks in. For instance, if $5000 of damage is done to your vehicle and your comprehensive deductible is $1000, the insurance company will cover $4000 of the damage and you are responsible for the rest.

You’ll also choose a deductible for collision coverage in the event an accident is your fault. You are only responsible for paying the collision deductible when you are not at fault if you live in a no-fault state.

Adjusting Your Deductible

Adjusting your deductible allows you to manipulate your premium. If you want to pay a lower premium, you raise your deductible. This saves you money on a regular basis on insurance payments, but it means if you are involved in an accident you will pay more out-of-pocket. If your deductible is extremely high insurance coverage might never kick in.

Lowering your deductible results in higher premiums, but it can save you a great deal in the long run. If something should happen to your vehicle, you will only pay a small out-of-pocket expense and insurance coverage will pay the rest.

Essentially, when it comes to choosing a deductible, you are taking a gamble. Investing more now is a safer bet and ensures a repair in the future will not break the bank. Investing less now is a riskier bet, but it has the potential to pay off if you never need to utilize your insurance coverage to pay for an expensive repair.

Deductibles are a personal decision and are based on a variety of factors, most of which are based on how much you are willing to spend now and in the future. If you are confident you will not need to use your insurance very often and you are willing to save money for an emergency, just in case, the higher deductible might be the right choice for you.

If you are interested in learning more about how you can choose the best deductible for your needs or you would like to search for affordable insurance in your area, give our free search tool a try.

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