This question is frequently asked in the insurance world. Having a low deductible can act as a security blanket for many people. You never know if something unexpected is going to happen and having a low deductible can help with pricey car repairs. Raising the deductible on your insurance policy can indeed decrease the price of your premium. However, if something were to happen—do you know if you have enough money to cover the damages to your vehicle?
A deductible is a relatively small amount of money that you would have to pay to your insurance company and they in turn cover the big-ticket expenses from damage to your vehicle. Raising your deductible can save you money on your car insurance premium; however, this leaves an awfully high risk for pricey repairs to your vehicle.
The best rule when it comes to choosing an insurance deductible is to only choose the one that you can afford. If you can only afford the $500 deductible, don’t go for the $1,000 deductible with high hopes of saving money. Having a higher deductible means that you should plan on having more out-of-pocket expenses. In turn, you should be able to afford these expenses and have enough money set aside for unexpected events.
In the end, pick the deductible that is suitable to you and your financial situation. If you pick a higher priced deductible, make sure you can afford the out-of-pocket expenses that come with having a high-priced deductible. If you have any questions on what type of deductible is right for you—you can give any of our agents at Community Insurance & Associates a call.