Auto Insurance Deductible and Discounts

Car insurance rates being what they are, is discount auto insurance a realistic possibility in today's world? Indeed it is.

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Higher Deductible, Lower Cost

Smart drivers consider every angle for reducing their car insurance premiums. We'll start with one angle, the deductible, which is the amount of money that you pay before the insurance company's own coverage plan begins. For many people, raising the deductible on their policy increases their opportunity to get a discount auto insurance rate. The larger the deductible, the lower the insurance premium is for that coverage. The insurer benefits by not having to pay out benefits on relatively small claims.

For example, you might be able to cut your annual premium on your discount auto insurance by 10% or more if you increase a deductible from, say, $250 to $500. Remember that if you are in accident and your car sustains damage, you will have pay up to $500 towards the cost of repairs. If the repair cost is more than $500, your insurance company pays the remaining amount.

Discount Auto Insurance Involves Tradeoffs

The amount of a deductible is almost always proportional to the amount of the insurance premium charged by the insurers. The breakdown is fairly simple: the lower the deductible, the higher the premium. And on the flipside, most low premium rates come with a higher deductible.

Deductibles can be something of a balancing act. A single costly accident or medical procedure could incur a very high deductible payment, but a lifetime of good driving and few automotive claims could make higher premiums a relative waste of money.

When shopping for discount auto insurance, be sure to ask specific questions about the deductible and other obligations left to the policyholder. An exceptionally low insurance premium rate may go hand in hand with an equally exceptionally high deductible amount. Try to find a balance between affordable premiums and a fair deductible when buying auto insurance.

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