If you are new to insurance and new to the terminology, you may not know what a deductible is. The deductible is the amount you have agreed to pay out-of-pocket towards your claim before your insurance begins to pay.
For example, let’s say that you are involved in an accident and the damages to your car are estimated at $1,500. If your deductible is $500, you will pay the first $500, and your insurance company will pay the remaining $1,000 to get your car repaired. But if the damages are less than $500, then you will pay for all of the repairs because it is less than the amount of your set deductible.
In addition to understanding what a deductible is, it is important to know that your deductible can have an impact on your insurance premiums. A lower deductible means you will pay less if you are in an accident. Your insurance company will be covering more of the repair costs. Because of this, a lower deductible will result in a higher premium. If you increase your deductible, it will usually lower your premiums.
If you have questions about your insurance policy and your deductible or you are starting to shop around for car insurance for the first time, call Insurance Doctor. We specialize in finding you the best possible deal on the policy that best fits your current needs.