Getting a car insurance policy entails learning new terminologies for a new policy owner. One such unique term is deductibles. When it comes to auto insurance, this term has a different meaning than other insurance policy deductibles.
To understand the concept of the car insurance deductible, keep reading this blog to know about deductibles in car insurance.
While filing a claim, car insurance deductibles refer to the amount the insurance policyholder must pay from their pocket before the insurance company provides the insurance coverage. A deductible is a form of risk-sharing.
For example, according to your car insurance, if you have agreed to pay a deductible of $1000 and your accident damage is $4000, then you are required to pay $1000, and the insurance company will pay the remaining $3000. Remember that the insurance company is liable to pay the insurance claim amount only if the damage cost exceeds the deductible.
In car insurance, the most common types of coverage include:
When you buy car insurance, you must select your deductibles carefully. This is a crucial step when you purchase insurance. Deductibles commonly range from $100 to $2,500.
A higher deductible means the car insurance rate will be lower, and you would have to bear higher out-of-pocket costs.
A lower deductible means the car insurance rate will be higher, and you would have to bear lower out-of-pocket costs.
The most commonly selected deductible among drivers is $500. You can choose the amount according to your needs and budget. Make sure you select an amount you can afford, as you would have to pay this car insurance deductible amount when filing a claim. We offer a wide range of auto insurance coverage options like Bodily Injury Liability, Property Damage Liability, Medical Payments, Collision, Comprehensive, Uninsured/Underinsured Motorist Coverage, and many more.