Deductible Definition
Deductible Definition
The Basics About Deductible vs. Out-of-Pocket Car Insurance Expenses
If you want the most affordable car insurance, determining your deductible is an excellent way to keep the price down and stay covered. But sometimes figuring this out can be confusing. What is a deductible for car insurance, anyway?
A deductible is a set amount that you must pay up front when making a claim on your insurance, and the rest of the expenses will be covered by your insurance. A deductible is commonly included in Collision and Comprehensive coverage. Typical deductibles range from $100 to $1,500, and the higher your deductible is, the lower your premium will be.
Let’s look at an example. You get into a collision that caused $4,000 worth of damage to your vehicle. Your deductible is $500. You would pay $500, and your insurance will pay the remaining $3,500 in damages. Your car’s ACV, or actual cash value, is considered in this situation as well. As long as the amount of damage does not exceed your vehicle’s ACV, which takes into account your car's age, its condition, and the amount you paid for your car, your deductible and insurance will cover all damages.
Finding the right deductible amount for you is based on a variety of things. First, you must know your budget. How much cushion do you have in your bank account that you can spend in case of an accident? You don’t want to max out on a bad month, so know your limits while keeping in mind that the deductible affects your premium rate.
This is one of the reasons that being a safe driver is the best way to secure yourself financially. If you have a good driving record with a low risk of accidents and have a bit of savings, you will always have affordable car insurance.
And as always, you should check around different providers’ options and find which one will offer you the best deal on car insurance accompanied by the best personal service. The process may take a little extra effort, but will pay off if anything should happen to your vehicle.
-
Learning Center
- Distracted Driving
- Selling a Car and Car Insurance
-
Term Life Insurance
- How to Calculate Your Term Life Insurance Needs
- Checklist for Applying for Term Life
- No Medical Exam Life Insurance
- Questions to Ask a Life Insurance Company
- How to Choose a Life Insurance Company
- Term Life Insurance | Infographic
- Life Insurance Terms Explained
- Term Life Insurance After Divorce
- What Term Life Covers
- When To Buy Life Insurance
- When to Review Your Term Life Beneficiaries
- Term vs. Permanent Life Insurance
-
Explaining Auto Insurance
- When and How to Update Your Policy
- Auto Insurance Coverage Definitions
- Car Insurance Quotes vs. Insurance Rates: How They are Decided
- Getting an Auto Insurance Quote Online
- How to Compare Auto Insurance Quotes
- Your Guide to MyAccount
- Car Insurance Fraud
- Liability Only vs Full Coverage
- Cancelling Your Car Insurance
- 8 Questions to Ask Before You Buy
- No Loss Statement
- Non-Owner Car Insurance
- Dropped From Your Insurance?
- What's An Auto Insurance Down Payment?
- What is High Risk Auto Insurance
- High Risk Auto Insurance
- Affordable Car Insurance
- Credit Ratings Checks & Insurance
- Auto Coverage Options
- No-Fault Auto Insurance
- Car Insurance
- The History of Auto Insurance [INFOGRAPHIC]
- Motorcycle Insurance
- Liability Only Car Insurance
- Defining Deductible
- SR22 Insurance
- Why Buy An Emergency Protection Plan
- Who is Covered
- Purchasing a Car and Insurance
- Leasing a New Car
-
Auto Insurance Laws
- Alabama Auto Insurance Laws
- Arkansas Auto Insurance Laws
- Florida Insurance Laws
- Georgia Auto Insurance Laws
- Illinois Auto Insurance Laws
- Louisiana Auto Insurance Laws
- Mississippi Auto Insurance Laws
- Missouri Auto Insurance Laws
- North Carolina Auto Insurance Laws
- South Carolina Auto Insurance Laws
- Tennessee Auto Insurance Laws
- Texas Auto Insurance Laws
- Virginia Auto Insurance Laws
- Car Care Tips
- Driving Laws
- Road Trips and Destinations
- Safe Driving Tips
- Tips for New Drivers
- Explaining Commercial Auto Insurance
- Medicare
- Affordable Care Act (ACA)
Quote