How to Use Your Car Insurance Deductible to Save Money
Car insurance premiums can make a significant dent in the family budget. Although it’s difficult to find ways to save money on insurance, one way that can lower your premiums is by increasing your deductible amount.
However, before taking this action, you should consider how it affects the rest of your everyday budgeting.
Raising Your Deductible Can Lower Your Premium Payment
A policy with a higher deductible will generally lower your auto insurance premium.
However, this is not always the case, so you should check with your insurance agent to determine whether this strategy will work for your needs.
Your deductible amount should not be so high that it causes a large financial loss if any accident should occur.
However, the deductible should be large enough to reduce the overall cost of your insurance policy.
Many Minor Repairs Don’t Require Insurance Coverage
Not all repairs are expensive enough to require insurance coverage that increases your premium.
Small dents in your vehicle may be able to be repaired without extensive bodywork.
Damage to your auto glass can generally be repaired without a large expense.
Minor issues such as chips in the windshield or broken side glass can generally be easily repaired without relying on insurance to cover the expense.
You Still Need Insurance to Cover More Extensive Repairs
When you have serious collision, fire or vandalism of your vehicle, the cost of restoring it to normal users can run into several thousand dollars.
In these cases, you will still be required to pay the deductible amount, but then, the insurance company will pay for the amount above your deductible.
Determine How Much You Can Afford to Pay Out of Pocket
An important first step is to determine how big a deductible you can afford to pay.
You will have money on hand to cover these uncovered expenses.
Of course, ensuring that you have the funds for the repair takes discipline and a solid habit of saving for the future.
You may want to put aside a small amount of money in your emergency savings account to cover any minor repair that is needed.
Raising your deductible to save in car insurance premiums works best for people who tend to experience a few accidents and unexpected damage.
Over the years, you can save a significant amount in insurance costs by covering minor damage yourself and only depending on the policy to cover expenses above that amount.
Category: Insurance
