When choosing car insurance, it is likely that you'll come across the term 'deductible'. You may have also heard that high deductibles are likely to lower your car insurance premiums. What exactly are 'deductibles', and are they right for you? I'll show you how deductibles can help you lower your insurance premiums and explain them in detail so that you can see if it suits your particular situation.

A car insurance deductible is the amount that you pay towards vehicle repair, or any other type of damage or accident before your insurance kicks in. Your insurance company won't pay anything until you've paid off the deductible. Therefore, the higher a deductible is, the lower your insurance rates will be because you assume more risk on your own.

For example, if you have a $1,000 deductible and your vehicle has suffered $2,500 in damages, you would have to pay $1,000 first and after you pay, your insurance will pay the remaining $1,500. There are 3 standard car deductible prices: $250, $500, $1,000. Some companies also have a higher deductible of $1,500.

Choosing a deductible is essentially deciding how much risk you're willing to assume if you were involved in an accident (or if your car was robbed, damaged, etc). Typically, you can choose to have auto insurance deductibles for comprehensive and collision coverage and personal injury protection.

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Deductibles can lower you monthly or yearly insurance premiums, but are they the best choice? That depends on a few factors, one of the most important factors is your current financial situation. Ask yourself if you're able to pay for the deductible, and only choose a deductible that you can afford to pay if you had to pay it today. Make sure you have enough money put aside (that you won't touch for any other reason) specifically for car repairs and emergencies. Remember that unless you pay the deductible first, your insurance company won't start paying, and you don't want to be left without the use of your vehicle because you can't afford the deductible.

If you have a clean driving record, you may want to opt for a high deductible to lower your car insurance rates. However, if you live in a high risk area or you've had a history of accidents, it may be safer to pay a bit more for your insurance and skip the deductible altogether.

Calculate the savings that different deductibles could offer. If the amount you save is higher than the deductible, it could be a smart decision to get a deductible. However, if the savings are the same amount or lower, it may not be worth it.

One of the most important things to do when looking for the right auto insurance is shopping around. Different insurance companies have their own rates and discounts and some offer special promotions to new members as a joining incentive. Yes, sure it's tedious work to scan the internet for the best car insurance rates. But don't worry, we thought of that so we've done the work for you! Find the best car insurance rates in the US right here. Or, simply use the box below to find the lowest car insurance rates in a click!

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