In order to have an auto insurance policy, you must pay policy premiums to the insurance company. Your policy premium is based on many factors, including your car, your driving record, and the coverages and deductibles you choose for your policy. Your policy premium will be billed to you every policy cycle and will change if you make any changes to your policy.
It’s important to understand what auto insurance deductibles are, as you may be responsible for paying this amount out-of-pocket if you have an auto insurance claim. Every policy has different coverages and deductible options, so it’s up to the policyholder to decide how much they’re willing to pay out-of-pocket in the event of a claim.
Understanding Auto Insurance Deductibles: Part One
When most people shop for car insurance, they focus on the monthly premium. But, your premium isn’t the only cost you must pay for your policy. Each time you file a claim, you must pay a deductible. Your deductible is a set amount of money that you agree to pay when you file a claim.
For example, if your deductible is $500 and the cost of the repairs is $1,000, you will pay $500, and the insurance company will pay the remaining $500. The lower your deductible, the higher your monthly premium. The higher your deductible, the lower your monthly premium.
Types of Auto Insurance Deductibles
1 – Optional Collision Coverage
This deductible applies to claims for damage caused by a collision with another vehicle or object. For example, if you collide with another car, this deductible would apply.
2 – Comprehensive Optional Coverage
This deductible applies to claims for damage caused by events other than collisions, such as fire, theft, or vandalism.
3 – Medical Payments Coverage
This deductible applies to claims for medical expenses resulting from an accident. If you are involved in an accident, you may be able to claim a deduction for your medical expenses. This can help to offset the cost of your treatment and make it more affordable.
4 – Personal Injury Protection (PIP)
This deductible applies to claims for medical expenses and wage loss resulting from an accident. If you are involved in an accident, you will be responsible for the first $500 of medical expenses and wage loss.
5 – Protection from Personal Injury or PIP
This coverage is to protect you or your passengers from the cost of personal injuries, such as medical expenses and wage loss. This deductible applies to claims for medical expenses and wage loss resulting from an accident. If you are involved in an accident, you will be responsible for the first $500 of medical expenses and wage loss.
Auto insurance deductibles are a great way to lower your premium payments. At the same time, it is important to be aware of the risks involved as well. The best way to find out what deductible is right for you is to get quotes from multiple companies and compare rates. This is the first half of this two-part article on auto insurance deductibles. Read the second installment to know more!
If you need auto insurance, contact 5280 Insurance. We offer auto insurance, home insurance, motorcycle insurance, umbrella insurance, flood insurance, and other types of insurance.