Most types of comprehensive and collision car insurance give you the option of how high your insurance deductible will be. This can vary from zero deductible to very high into the thousands of dollars. In the event of a auto claim, the deductible must be paid before the insurance kicks in and makes a payment on your behalf. Having a lower deductible means that you will have less out-of-pocket costs.
When you have lower insurance deductibles it means that if something happens and you need to file a claim, you will have less out-of-pocket costs than if you had a high deductible insurance. This can be a great benefit especially if one is in a tight financial situation at the time a claim is filed.
In order to pay for the lower out-of-pocket cost, the insurer will ask that you pay a higher monthly premium to make up for their potential loss and risk. In other words, the insurance company will have to pay more of the the claim costs than if you had a higher insurance deductible.
All pros and cons are predicated on risk and reward. Choosing a lower insurance deductible also needs to be based on the risk and potential reward for doing so.
- 51How to Get the Most Cash For Your Totaled Car PART 1 of 3 If this is your first (or not) total loss vehicle claim, this article is for you. Here's the thing... The auto insurance companies don't want to pay your claim! There,I said it. That is why they…
- 44The most common response I see quoted online for the question, "what makes a car totaled", is when the cost to repair the damage equals 75% or more of the actual cash value of the car. This is very misleading because this percentage is different in some states. While some…
- 42PART 2 of 3 Creating a cash value car appraisal If you rely just on the asking price or sale price of a couple vehicle listings you printed off the Internet, you could be making a big mistake and miss out on several thousand dollars of extra cash for your…