The terminology surrounding car insurance can be a bit confusing if you don`t know what they mean. One of the most important terms that you will come across is "deductible". Even if you don`t understand much else, this is one word that is absolutely vital to choosing your car insurance.
Quite simply put, deductible is the amount you have to pay in case of an accident. However, it`s more complicated than this and your car insurance strategy will depend greatly on how much you actually can afford to pay.
How It Works
The deductible is the amount you pay in case of an accident, before the insurance company. For example, if you have a deductible of $500 and the damage in an accident is $1,500, you would pay the first $500 and the insurance company would pay the remaining $1,000. Likewise, if your deductible was $1,000 and the damage was only $800, you would pay the whole thing.
Deductible Affects Your Rates
Car insurance requires that you pay a specific amount per month or year. This is your monthly rate and it usually won`t change within the year, unless you are in an accident. The amount you pay on a monthly basis will depend on how much deductible you wish to pay, or how much of the upfront costs you are willing to take care of in the event of an accident.
The most common amounts for deductibles in car insurance are $100, $250, $500, and $1,000, though different companies may offer other options. The higher the deductible, or the amount you pay in case of an accident, the lower your monthly rates will be. So, if you opt for the lowest deductible, $100, meaning the insurance company is liable for nearly all costs, you`ll end up paying higher monthly rates.
Which option you choose (high deductible/low rates or low deductible/high rates) will depend on what you can afford and also how often you expect to need your insurance. If you tend to have an accident of some sort every few months, you will likely want to pay the minimum amount and let the insurance company take on the majority of costs. For safer drivers who have an excellent driving record, it`s easiest to go with the higher deductible and pay lower rates instead.
Limitations
Every insurance company has a limit to the amount they will pay. The rates you have each month will also affect this, so you can decide how high you want to go for the best limit, without needing to pay too much per month. The majority of drivers never need the highest limits.
How does the limit affect your deductible? Well, you are responsible for paying the amount of your deductible, of course, but once the insurance company has paid up to the limit, you will have to pay any costs over that.
To give you a quick example, let`s say your deductible is $500, the limit is $10,000 and damages end up costing $12,000. You would pay the first $500. The insurance company would then pay their $10,000 and you would be responsible for the remaining $1,500.
Your car insurance doesn`t have to be confusing. Take the time to go over the numbers and figure out what you would be able to afford out of pocket in case of an accident and how much you can afford to pay on a monthly basis. A little research can go a long way. It`s also helpful to speak with the car insurance agent who can give you a good idea of what the norm would be for your car`s age and your driving experience.
Provides complete home and auto insurance solutions and offers a 30 day money back guarantee to new clients. Get an accurate no obligation car insurance quote online.H.264 Converter windows was really the good converter for the video conversion needs for H.264 Converter windows supports all important file formats. H.264 Converter mac was Compatible with more than 150 video formats. For keeping up rapidly advancing technology, this Video conversion advice adds new formats as they're released!Download Missing DLL Files811,How to Fix act.ui.widgets.ni.dll Not Found Error,How to Fix act.shared.collections.dll Not Found Error,How to Fix acsnap.dll Not Found Error,How to Fix act.ui.lookupsresources.ni.dll Not Found Error,How to Fix actcntxt.dll Not Found Errorerror code 7 is defined as a critical system problem and cannot be fixed completely by easily installing any software. 7 error is associated with system file which serves as a crucial part of Windows operating system. Any modification on the important document can possibly bring about serious problems to the computer system. If you like to repair winpe error code 7, choose SmartPCFixer.
Read More: