When
quoting auto insurance for clients, we frequently discuss how to choose the
right deductible. I thought I’d take a few
minutes to share this information here on our website too!
A
deductible is the amount you pay out of pocket when you have a claim. If you have a $500 collision deductible and
have an accident, then you would pay $500 towards repairing your vehicle and
insurance would cover the rest.
The
deductible you choose directly relates to the amount of money you spend on
premiums each month. The higher the
deductible ($250, $500, $1000), the lower your monthly cost.
So
how do you choose? Cheaper price or
lower out of pocket expense?
First,
look at your emergency savings. Do you
have enough cash available to cover a higher deductible if you had to pay
it? If the answer is no, then you’re better off
paying a little extra each month.
Compare
the cost savings. When we run a quote,
we can show you several different options.
Ask your agent to run the premium based on several different deductibles
so you can see the actual dollar cost savings.
You
can always change your mind. If you’re short on cash
now, but know you could afford more out of pocket next year, you’re always able to
change. Keep your deductible in a
comfortable range and you’ll always be well protected!
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