Deductible Options With Auto Insurance – A Helpful Guide
Deductible options in auto insurance policies are beneficial both, for the insurer (the insurance company) and the insured (whose vehicle is covered by the insurance company) as well. This is because the insurer is spared the processing expenses of minor claims, while the person who is getting the coverage has to pay a lesser premium since he/she has agreed to pay the initial cost when a claim arises.
Let us take an example to understand this better. For instance, when an auto insurance policy carrying a deductible of $500 is involved in an accident in which the vehicle suffers minor body scratches costing $200 in repairs, the insured seldom raises a claim, preferring to get the job done at his/her own expense to avoid unnecessary hassles. On the other hand, if the windshield of a sports coupe costing $1000 gets damaged, the insured may want to dish out $500 from his/her pocket, the insurance company paying the balance amount. This simple arrangement, as can be envisaged, is gratifying for both the parties.
The Deductible Options In Vehicle Insurance Can Be Different Too
However, the deductibles vary in Atlanta, GA from company to company as well as from state to state. Some companies are happy with smaller deductibles even when the pay out limit is higher. But there are those who insist on higher deductibles against higher limits. However from whatever angle one may look at it, higher deductibles invariably cause reduction of the premium although the insured bears in mind that he/she has to pay up a hefty sum, if an accident does indeed occur. But people are basically optimistic in their outlook, preferring lower premiums and ignoring the chances of an accident. And needless to say, the auto insurance companies also endorse such views, knowing fully well that the insured will always be careful to avoid an accident at least for the fear of paying through the nose if an accident occurs and so sits smug.
Car insurance deductibles are characteristic in most type of risks that include Comprehensive coverage, Collision coverage, Personal Injury Protection (PIP) and many more. In these cases, the insured is free to set the deductible amount suitable to him/her – but these are not applicable to Liability Insurance, Uninsured Motorist coverage as well as Underinsured Motorist coverage.
Although auto insurance is mandatory all over the United States , you will always be able to get a plan for policy limits and deductible option merely by understanding the quantum of car insurance needs. In fact, you can easily draw a balance between your insurance benefits vis-à-vis the amount to pay for such benefits where the deduction option plays a somewhat significant role.
However, deductibles do not prove effective in all cases. For instance, if an insured owns a 10-year-old car valued at $1000 and has collision coverage where the deductible is $1000, that collision coverage should better be waived as it can serve no purpose at all.