When you purchased your auto insurance policy, you probably remember selecting a deductible amount along with the coverages you wanted for you and your vehicle. A higher deductible usually means lower premiums, but it also means that you may have to come out of pocket more when you file a claim. What is a deductible exactly? A deductible is what you are required to pay out of pocket before your insurance company is going to cover certain damages [Source: Esurance]. Damages might include the cost to repair the damage your vehicle sustained or the medical expenses that accrue for the care rendered to treat your physical injuries.
So, let’s say you were recently involved in an auto accident where you crashed your vehicle into a wall that left the front of your car severely damaged. When you go and submit your claim through your insurance carrier, you might be surprised to find that they aren’t willing to write you a check for the cost of repairs up front. And why is this? Well if you have a $1,000 deductible and your insurer has determined that your vehicle’s damage is worth $1,500, you have to pay the first $1,000 before they will cover the remaining $500.00. Therefore, your deductible will affect your car accident claim in that you must fulfill your deductible amount before your insurance coverage will kick in. Dan’s Fix-A-Dent is not going to release your vehicle to you until you pay the bill in full, so don’t forget to bring your checkbook.
This is why it is extremely important that you understand what a deductible is and how to choose the right amount when you first purchase your coverage or renew your policy. So, here are a few things to consider concerning auto insurance deductibles.
- When you choose a higher deductible amount, you are going to be paying more out-of-pocket expenses. In the event you have a fender bender, expect to pay the amount of your deductible or less based on how much damage has been done. While this might be an inconvenience at the time of an accident, remember, a higher deductible means you are paying a lower monthly premium. If you drive like Mario Andretti at the demolition derby you may want to take a second look at your deductible.
- Now, the lower your deductible is, the better the coverage. When you select a lower deductible amount, you are only required to pay that amount after an accident and then your insurer will cover the rest. Obviously, you will need to have adequate coverage for your policy to cover all of the remaining damage after you satisfied your deductible, but that means less is coming out of your pocket after a collision. However, when you purchase a policy with a lower deductible, you will be paying more each month. It all comes down to whether you want to definitely pay now or potentially pay later.
So, before choosing a deductible, you should first assess your financial situation to determine what you can afford and then consider where your drive and the likelihood of an accident occurring. If you are a newer driver or believe you are living in the Fast and Furious movies, that may sway your decision. Now, if you have been injured in auto accident, and you are having trouble collecting the compensation you are entitled from the insurer, consider contacting Greenville, SC car accident lawyer Paul Hammack.