At Capalbo Insurance Group LLC in South Kingstown, RI, we understand that one of the most important decisions you will make when purchasing a new auto insurance policy is the deductible amount you select.
What is the Deductible?
An auto insurance deductible is the out-of-pocket amount you agree to pay before insurance will pay the rest of your accident claim. It is your share of the financial responsibility for an auto accident. Typically, comprehensive and collision coverages are the standard car insurance coverages requiring a deductible before insurance will pay the claim. You could also see a deductible if you have uninsured/underinsured motorist coverage.
Comprehensive and collision deductibles could vary from as low as $250 to as high as $2500 or more. Deductible amounts vary by insurance company. So, what deductible will work best for you? Let’s take a look at the pros and cons of different deductibles.
Lower Deductibles
Pros:
Lower auto insurance deductibles mean your financial responsibility will be minimal in the event of a claim. It gives you greater peace of mind that if you must file a claim, you are not likely to break the bank to pay your part and get your car repaired.
Cons:
Lower deductibles mean higher insurance premium payments. While you benefit from paying less for a claim, you pay a premium for that luxury. Another thing to consider is the potential to spend more money over time, especially if you rarely report a claim.
Higher Deductibles
Pros:
Higher deductibles mean lower premium payments on your insurance policy, putting more money in your pocket now. This can be very helpful if you have a tight budget and need to save cash.
Even when filing a claim, you could save money long-term with a higher deductible.
Cons:
A higher deductible means you have higher out-of-pocket costs when filing a claim. The increased financial responsibility can be challenging if you are already on a tight budget. Additionally, many lienholders are reluctant to finance customers with higher deductibles. They believe that carrying a higher deductible is impractical. They fear such a large amount of financial responsibility will incur a hardship for you, resulting in the vehicle not being repaired and reluctance to repay the loan.
We Can Help You Make The Right Choice
At Capalbo Insurance Group LLC in South Kingstown, RI, we will help you review your insurance history, discuss your financial situation, and other unique circumstances to help you choose the right auto insurance deductible. Call us today at (401) 268-3000.
