How Much Deductible Should You Choose?

By Author: Marcus Stalder
Total Articles: 491
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Choosing a deductible for your auto insurance quote might seem like an easy task, but it is actually a very big decision that should not be taken lightly-especially since your deductible has a big effect on the premium you are charged and because you must have enough money in the bank to cover it, should you have an insurable incident.

A deductible is the amount of money that you need to pay out of pocket toward damages on your vehicle if you suffer an insurable event like an accident or car theft. Deductibles are only paid when you have damage that is covered by your insurance policy-otherwise, all damages will come out of your pocket or that of the person responsible for causing the accident.

Because a deductible must be paid out of your own, personal funds, it is important that you choose a deductible that you can actually afford to pay. Otherwise, you might end up with a deductible that hurts your savings, results in additional debt and prevents you from being able to get your car in working order. Without a car in working order you could suffer other financial difficulties such as the loss of a job.

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... is tempting to choose a high deductible when shopping for an auto insurance quote because the higher your deductible is, the lower your auto insurance premium will be. Since accidents don't happen to most people very often, it can seem like a real waste to pay for a high premium each and every month. But as tempting as that might be, ask yourself this-does it really matter? If you have a cheap auto insurance premium every month but you can't afford the deductible, then you are switching one difficulty for another.

Instead, choose a deductible you can afford-one as high as you can afford-and then enjoy the resulting premium. That way, you will take advantage of as cheap a premium as you can get, you will have the comfort of knowing that you can afford your deductible if something should happen, and you won't feel as though you are throwing away money on a policy that is not providing as much benefit as you need.