The cost of auto insurance differs by hundreds depending on where you shop. A High Deductible can make a big difference in how much you pay each month on premiums. What is an insurance deductible? When you choose an auto insurance policy you decide how much you are prepared to pay out of your own pocket if you are involved in an accident – after which the insurance company comes up with the balance. In general the higher your deductible the lower your monthly rates are going to be.
You can reduce your auto insurance rates in two important ways. You can assume more risk by choosing not to take out collision coverage. This is advisable if you have an older, cheaper car. If your car is new and worth a lot of money you can ask for a higher deductible. A High Deductible can mean lower monthly premiums because your insurer is assuming a lowered financial obligation.
This can result in a considerable saving. For example – if you increase your deductible from $500 to $1000 your monthly payments could decrease by up to 30%! If you increase it to above $1000 you could save as much as 40%. If you are involved in small accidents you way end up paying more, but you will still save money. At the same time you are protected against the hundreds or even thousands of dollars you may need if you are involved in a serious accident. So choosing a High Deductible isn’t as risky as it sounds.
So it’s not a bad idea to do your homework before signing on the dotted line. Before you do, make sure you get a number of quotes to find out what benefits are offered by your insurer for choosing a High Deductible. Before raising your deductible make sure you have enough money set aside to foot the bill at short notice.
A High Deductible isn’t the only way to save money on your auto insurance. You should always do thorough research to find out which discounts your unique driver profile qualifies you for. Always maintain a safe driving record, assume as much personal risk as you can in your coverage and choose a model of car that saves you money. Finally always choose the lowest cost insurance company that adequately meets ALL of your needs. Good luck!