How To Pick Your Car Insurance Deductible

While higher insurance deductibles can decrease your deductibles, it is important to know how much you can afford to pay out-of-pocket and how much your car is worth in case you need to file a claim.

How deductibles work

A car insurance deductible is the amount of money you are required to pay for vehicle repairs before your auto insurance company pays the remaining amount of the cost, up policy limits. Deductibles apply to comprehensive and collision coverage.

Determine what you can afford

The amount of money you can pay if you are involved in an accident should be the most important factor when determining your insurance deductible. A higher deductible will mean a lower premium since the insurance company will be paying less to repair or replace a car involved in an accident. With a higher deductible, people are also less likely to file an insurance claim.

Review your car’s value 

The value of your car can also help determine your deductible. The more expensive your car is, the more it costs to carry insurance on it. A high deductible makes sense on a high-value vehicle because the savings can be significant. If you have a car that is ten or more years old, having a high deductible may not make sense since the value of the car is probably just a little more than the deductible.

Assess your risk

If you are more likely than not to have a claim, you want to choose a low deductible. High-risk drivers can save money on their car insurance by choosing high deductibles. To compare how your premium would be different, get quotes with different deductible amounts.