Insurance experts are recommending that policyholders reevaluate their insurance policies and review their deductibles. Even with the average insurance cost at its lowest level in more than a year, analysts say that car owners can do even more to slash their insurance expenses. Increasing the amount of deductibles leads to lower premiums. However, experts say that policyholders should only increase deductibles if the value of their vehicles are low enough for them to shoulder any minor repairs.
By increasing deductibles, car owners accept the fact that their insurers would only accept repair costs if they are above their declared deductibles. Most insurance firms allow their clients to raise deductibles up to $1,000. This amount would typically mean 30 to 40 percent off insurance premiums. Policyholders, however, should have enough money to pay for any minor body repairs or parts replacements.
Also, experts say that for policyholders to make the most of lower insurance rates, they need to have vehicles with lower values. Typically, a car must have a value of $5,000 or less for any increase in deductibles to have a direct effect on the premiums. Anything below that suggested value means that car owners can forgo getting comprehensive and collision coverage.
Specialists point out that with comprehensive and collision coverage, policyholders have to shell out more money just to insure their vehicles. If the value of a car is substantially low, then car owners can consider dropping added insurance options. Experts say that it is often much cheaper for policyholders to pay for any damage with money from their own pockets than rely on the insurance coverage. Because comprehensive and collision coverage are only options, policyholders can choose to forgo of the protection they provide. Instead, motorists can pay for any repairs that their vehicles may need.
Motorists with a history of bad judgment calls and several driving violations are not advised to raise their deductibles. Because these car owners are more likely to get into accidents, they are often advised to get as much protection as they can. While their insurance premiums may go up significantly, the benefits of being fully protected outweigh their insurance rates. Car owners need to assess the particular risks associated with them and determine if raising deductibles is the best option for them. Policyholders who have not filed for claims within the last two years can consider raising their deductibles because they are not high risk policyholders.
