Deductible and Discounts in the World of Auto Insurance
Affordable car insurance does not have to be an impossible dream. It could easily be well within the grasp of anyone in Kansas willing to do a little work to find it.
Try a higher deductible. There are a great many ways to come at a lower auto insurance premium. One of those ways is the deductible, the amount of money the policy holder has to pay in the event of an accident before the coverage plan kicks in. Raising the deductible is a simple way to lower the costs of an auto insurance policy. Because the insurance provider does not have to pay out for relatively small claims, the fee for the insurance is lessened.
Doubling the deductible from $250 to $500, just as an example, might lower the annual premium by 10%. It is important to keep in mind that this means $500 will have to be paid out of pocket if a claim is filed, before any coverage comes into play. The insurance company will pay anything over that amount, up to the limit of coverage.
Saving money on auto insurance requires compromise. Generally speaking, the amount of the deductible is directly proportional to the amount of the insurance premium. When the deductible is lowered, the premium goes up. And of course, it works the other way as well.
Carefully balancing this is almost an art. An accident that results in a lot of property damage, car damage, or bodily injury could induce the payment of that high deductible, but drivers who go their whole lives without any significant accidents and very few insurance claims could well use the money saved from keeping the deductible high without ever having to pay it.
In the process of finding discount auto insurance, ask the agent directly about the correlation between deductibles and the premium. A premium rate that looks amazingly low is more than likely accompanied by an amazingly high deductible. A balance is necessary so neither is too overwhelming.
What makes a good time to raise auto insurance deductibles? Of course, the answer depends on individual situation, especially financial circumstances.
Drivers who are insuring on a liability basis would be best served by a higher deductible, since they won’t be repairing the car in any case. Do some research before deciding, however, as some states have a legal requirement for a minimum deductible. Finance companies will also require some level of deductible if the policy holder is still making payments on the car.
In essence, it all hinges upon the individual driver. A high deductible means a lower premium, but it also means more money to pay if there is ever an accident. Taking the higher deductible means the driver has confidence any collisions can be avoided. A lower deductible means more money paid to the insurance company on a regular basis, but less money paid when there is an accident.
One way to take advantage of this is to save some or all of the money from taking the higher deductible. That way, the money can still be available to pay the deductible in case of an accident. If the accident never comes, the money can be used for something else.