Uncertain about how well the United States economy will do in the coming months, most car owners expressed willingness to undertake all means that would help them save on auto insurance cost. But many policy holders neglect one thing that could significantly lower their premium cost—choosing the right deductible. According to experts, paying higher deductibles could reduce the premium by a huge percentage. But they advise consumers to consider several factors first before spending on deductibles unnecessarily.
Industry specialists explain that carriers require policy holders to pay a certain amount of money out of their pocket when filing a claim. This sum, or the deductible, is used to cover a portion of a claim. Deductibles could range anywhere from zero to $1,500, depending on the carrier and the cost of an insurance premium.
Experts say consumers have to pay the deductible they signed with their insurer upon filing for a claim. Since the deductible covers a portion of an auto insurance policy, consumers who agree to pay $1,000 will get $2,500 for repair costs quoted at $2,000. Car coverage is different from other types of insurance so consumers are reminded that they are required to pay their deductible each a file for claim is made, unlike other policies which do not require them to pay out of pocket until the following year.
According to market analysts, most auto insurance providers offer deductibles ranging from 0 to $500, with most consumers opting to pay $500. Since having a deductible of zero means an excessively high premium rate, insurers note that it is very rare for policy holders to skip on the expense.
Experts tell consumers that their vehicle will not be fixed, unless they are able to pay their deductible, so they must not choose an excessively high amount. Consumers are advised to choose an amount that they are comfortable paying when they need to file for a claim. Experts say it is best for car owners to set aside an amount that meets their deductible rates, for since they cannot foresee when they will need to file for a claim.
Specialists recommend lower deductibles for car owners who live in large cities, since they are expected to file for a claim more often. Paying for a huge amount every time a claim is made is a huge burden, they add. Car owners who live in safe areas and have excellent driving records may bank on higher deductibles for lower premium rates. Experts tell consumers that there are many auto insurance websites that have calculators which they could use to determine how much they will spend on it.