Choosing The Right Deductible For Your Car Insurance Needs






car-insurance-deductibleOnce you have determined the right type of insurance policy for your needs you will need to determine where to set your deductibles. This is important because it will determine the rate of your monthly insurance payment. If you pay a higher deductible in the event of a claim, you will be charged a lower insurance premium. This is because you will present a lower financial risk to the insurance company. If an accident occurs, they will be responsible for less of the financial damage.

A lower monthly payment may be exactly what you are looking for as well, but you should keep in mind that you will have to pay the deductible if an accident occurs. The monthly payment will come routinely while the deductible will have to be paid out only in the event of an accident. When you choose your deductible, therefore, make sure you consider exactly how much of an accident’s costs you can afford to absorb into your own finances. The reason you have insurance after all is to protect you from the largely unforeseen costs of an accident. You should also consider your state’s laws regarding car insurance when making this choice. You probably want more than the minimum amount of coverage required because in a state where they only require liability, like Illinois, you may find your self underinsured in the case of an accident.

You can then raise your deductible to help offset the cost of better coverage. Choosing your deductible is a balancing act. Make sure you plan your expenses so that they are manageable on both the monthly and the deductible fronts.


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