- October 30, 2020
- Posted by: admin
- Category: Uncategorized
If your car collides into a tree, the collision coverage should pay for damages. However, if the collision coverage carries a deductible of $500 and the total damages total to $1800, your insurance company will only pay the difference.
Here’s what we mean by deductibles.
What Are Insurance Deductibles?
An insurance deductible refers to a fixed amount that a policyholder must send every year before the policy coverage starts paying the costs. Your insurance company sets this amount to make sure that you share some cost of the claims. From the insurer’s perspective, this amount helps them deal with the financial stress due to the accumulation of multiple claims at one time. In short, this is the amount that you have to pay out-of-pocket before your insurance coverage kicks in and covers the rest of the amount.
Pick Your Deductibles Smartly
To be able to pay your deductibles, choose the amount strategically and thoughtfully. The final amount largely depends on your willingness to take the risk and your comfort level. Start by considering your emergency fund and bank account. There is no point setting a $1000 deductible if you can’t afford to pay it. It’ll be frustrating not to be able to drive your car after an accident because the deductible amount was unreasonably high.
The value of your vehicle also has a vital role to play. As a rule of thumb, more expensive cars lead to higher insurance costs and higher deductibles. This only makes sense if you have a new car and could save some costs. There is no point in getting high deductibles on an aging vehicle. Similarly, if you’re a high-risk driver, higher deductibles will make more sense.
This is a popular option used by policyholders, especially if you struggle to save an emergency fund. The underlying principle is that you earn a certain amount off your deductible for each year of safe driving. Eventually, the deductibles will vanish completely. For instance, if you have a $500 deductible and you’re struggling to pay, apply for a $100 vanishing deductible. After three years of safe driving, you’ll accumulate $300 credit and only be required to pay $200 for the damages in an accident.
Find Affordable Car Insurance Quotes in Springfield, MA
If you’ve tried the solutions mentioned above and have been unable to get a loan, change your agent. Opt for someone who understands your financial limitations and helps you set the deductibles accordingly.
If you’re in Springfield, MA Charlie Ross is a leading auto insurance agent at Western Mass Auto Insurance, who can help you out. Visit our office, and Charlie would be glad to offer affordable deductibles.
Here are the directions to our office for Springfield car insurance.