Car Insurance Deductibles Demystified

Any car owner who is searching for insurance coverage in order to protect himself from devastating financial liability in the event of an accident, damage incident or theft, should understand how to choose the best deductible amount on the policy selected.

The term car insurance deductible refers to the amount of money that the policy holder has agreed to personally cover toward repairs and expenses out of his own pocket before the insurance company issuing the policy covers the remainder of what is owed to the limits of the coverage selected on the policy.

Whether a driver is seeking Pennsylvania auto insurance or insurance in any of the other 49 states, he will have to determine what amount of deductible his financial situation makes him comfortable with.

A car owner who chooses to accept a $1,000 deductible on his policy, for example, should be aware that in the event of accident or an incident in which his car or another vehicle is damaged and repairs are required, he will be responsible for writing a check for the first $1,000 of whatever the total bill amounts to for repairs or damages.
 

If a car repair shop requires payment of $4,000 to handle fixing an automobile, they will not be able to begin doing the work by having only the $3,000 compensated by the auto insurance vendor because the policy holder is expected to be able to cover the amount indicated by the deductible coverage noted in his insurance policy.

The higher the amount of deductible chosen by the policy holder, the less the amount of the premium charged by the insurance company because as the policy holder’s financial investment increases, the insurance company’s portion of the financial liability decreases. But car owners shouldn’t make the mistake of choosing the highest car deductible amount offered by their insurer unless they are certain they have the financial resources to back it up in the event of an automobile accident, an event that usually happens when it is least expected and most often when a household’s budget can least afford it to have happened.
Smart car owners consider their monthly income, the amount of savings they have in the bank as well as their ability to use credit if necessary in order to cover their chosen deductible amount. Reliable auto insurance agents recommend that car owners choose a deductible amount they can comfortably afford to pay out today, if necessary, rather than gambling by choosing the highest amount solely for the purpose of achieving lower insurance rate premiums.