Should I Lower My Insurance Deductible?

Having an adequate auto insurance policy helps offer the policyholder the peace of mind that they are protected if an unfortunate accident or unexpected damage occurs when driving. Sometimes, when reviewing the wide range of available auto insurance policies, it can be confusing to understand what types of coverage are needed and what may not be necessary. A common question that drivers have when it comes to auto insurance is their deductible amount; when this idea is better understood, it can help a policyholder make a better informed financial decision. If you have questions about car insurance in San Diego, California, Windfall Insurance Services Inc. is here to help. Read on to learn more about deductible amounts and what happens when you lower your deductible.

How Car Insurance Deductibles Work

An insurance deductible is essentially the overall amount that the insured policyholder will be required to pay out of pocket when a claim is made before an insurance company pays for the remainder of coverage costs. For instance, if your insurance company required a $1,000 deductible, and your bill is $5,000, you would initially have to pay the $1,000 out of pocket, then the insurance company would pay for the remaining $4,000. The overall cost of an insurance deductible can vary and will be determined by a variety of factors, such as the level of coverage, the type of policy that you select, etc. It is important to note that your insurance deductible will only work for costs specifically included in your insurance policy. Therefore, if a particular situation is not outlined in the insurance policy underwriting, it cannot be applied to your deductible. Most deductibles amounts will reset after each policy period, however, you will be required to pay a deductible each time that you make a claim.

Choosing The Right Deductible Amount For Your Situation

It is crucial to understand your deductible amount because it can significantly impact the amount you will be required to pay out of pocket. You will want to make sure that you have an adequate amount of coverage without overpaying for auto insurance. If you choose an insurance policy with a lower deductible, your monthly premium costs will likely be more expensive. On the other hand, if you choose a higher deductible amount, you will spend less on monthly insurance premiums, but you risk paying more out of pocket in the event that you need to file an insurance claim. If you are wondering what deductible amount you should pay, it is best to evaluate your current financial situation; if you are able to afford a higher deductible, you will be rewarded with paying less each month, but if you opt for a higher deductible, there will be less risk of decreasing your savings in an accident, although you will need to budget for higher monthly costs.

If you have insurance questions in San Diego, California, contact Windfall Insurance Services Inc. today for a consultation.