When people talk about car insurance, a lot of the time you will hear the topic of car insurance deductibles. However for the most part, what they mean by “deductible” remains a mystery. So today let’s tackle the not-so-mysterious world of car insurance deductibles.
Car Insurance Deductible Defined
The deductible is the portion of a claim that you agree to pay before your coverage begins.
This does not mean you are not covered; you have auto insurance coverage from your policy’s effective date. Insurance is one of those things we pay for and hope to never use. When you have an accident and use your insurance, you are required to first pay the portion you agreed to in your policy. This is your car insurance deductible. For the most part, choosing a higher deductible will decrease the cost of your auto insurance premium, because you are taking on more of the financial risk if an accident occurs.
Deductible Amounts Explained
Still a bit confused? Let’s say your car insurance policy has comprehensive physical damage coverage with a $500 deductible. If you have an accident where you hit a tree causing $1000 worth of damages to your vehicle, you are responsible to pay $500 (your agreed deductible), and your insurance company will pay the remaining balance. However, if your damage is less than $500, your insurance company would not be responsible for any portion of the damage.
Insurance provides you with protection in case of an accident, and your deductible is the amount you feel you can pay if an accident occurs. Auto insurance needs differ from person to person, and at Danback our licensed agents are here to walk you through the process and help answer all your questions. (Source: Elephant.com)
Contact us today to discuss your car insurance deductible at 512-454-4567.