What You Should Know About Car Insurance Deductibles

One of the more common points of confusion regarding car insurance policies is how auto insurance deductibles work in Tampa, FL. It’s important to note that auto deductibles are different in ways than health insurance deductibles, as you do not have to worry about meeting an annual deductible.

Instead, you are responsible for the deductible on your policy for each time you file a claim. This means if you total your car, the insurance company will give you a payout for the total current value of your vehicle, minus the deductible. A car worth $10,000 with a deductible of $1,000 would net you a $9,000 payout.

Meanwhile, if repairs to your vehicle fall under your deductible amount, your insurer pays nothing, and you are fully responsible for paying for them, as the insurance provider only covers damages greater than your deductible amount.

Deductibles may exist for comprehensive and collision coverage, as well as personal injury protection and uninsured or underinsured motorist property damage. The deductible will work exactly the same in all of these different coverages.

Choosing a deductible

Now that you have an understanding of what a deductible is and how it works, you should spend some time thinking about how you will choose a car insurance deductible for your policy in Tampa, FL.

In most cases, you’ll find deductibles ranging from $100 to $2,000, with the most common choice being $500. There isn’t a right or wrong choice for a deductible amount—it’s mostly based on personal preference. Higher deductibles mean lower premiums, but higher out-of-pocket costs. Lower deductibles mean lower out-of-pocket costs, but higher premiums each month.

You’ll need to consider how much you’re comfortable with paying out of pocket if you find yourself in an accident. How likely are you to be able to afford a deductible that’s, say, $1,000?

Part of this is a sort of calculated risk. You’ll need to consider how likely you are to file a claim. What sort of accident history do you have? Are there any particular risk factors in your area you need to consider, such as driving on busier or more hazardous roads?

Part of this choice is also a financial calculation. You can save quite a bit of money over time if you have lower premiums and don’t get into a situation in which you have to pay out of pocket for repairs. At some point, though, the changes in savings are negligible even for larger jumps in deductible prices. And remember, there is some element of risk here, too. Sure, you can build up some significant savings over time, but if you end up getting into an accident, you might sink all of those savings into a one-time repair.

For more tips and information about choosing car insurance deductibles in Tampa, FL, contact Cheap Car Insurance Guru today and we will be happy to point you in the direction of cheap car insurance policies that will work for your situation. We look forward to working with you and answering your questions.