A lot or a little, what deductible do I choose?
A lot or a little, what deductible do I choose? All car owners have to go through the time of deciding what their insurance policy deductible will be. Many are caught off guard by the question, not being familiar with the implications of choosing one amount or another.
Unlike the deductible for health insurance, the deductible for an auto policy is always the amount of money that the insured will pay when they make a claim to their insurance company. It is important to emphasize that this will be paid on every insurance claim.
For example, if the collision deductible is $ 500 and, after an accident, the car repair is $ 2,000, the affected customer has to pay the first $ 500 and the insurance company will pay the remaining $ 1,500.
If the day after the repair, this same customer has another accident and the car repair costs $ 400, it will be the customer who pays the entire settlement since the claim does not exceed the $ 500 set deductible.
You could say, well, it is best to choose a lower deductible so that, in the event of an accident, it is the insurance company that pays. And you will be right, what happens is that, in the insurance business, what insurers do is buy risk. And the lower the deductible, the more risk they assume, so the premium – or monthly payment – of the policy will be more expensive. The less deductible, the more expensive the monthly premium, and vice versa.
Having clarified this point, the most recurrent question is what deductible do I choose?
There is no universal answer. It depends on each insured. There are people who find it more interesting to pay little money monthly and at the time of a claim to pay a high deductible. So they set your deductible at $ 1,500 or $ 2,000. Others find it safer to pay a higher premium each month and, in the event of an accident, let the insurer take the greatest risk.
If you are an experienced driver, regularly drive on safe streets, and have the money, some experts recommend a $ 1,000 deductible. A lot or a little, what deductible do I choose?
Whatever deductible the insured chooses, do not overlook that, to repair your car, you must have access to that money, either from a credit account or from your savings account. Because only after disbursing the set amount of deductible, the insurer will assume the rest.