If you’re looking to buy car insurance, you may have heard the term “deductible” being thrown around. But what is a deductible in car insurance? The answer is actually pretty simple. A deductible is the portion of a covered claim or loss that is paid for by the insured. In other words, it’s the amount of money you have to pay out-of-pocket before your insurance company will cover the remaining costs.
How Does a Deductible Work?
When you purchase car insurance, you will have to choose a deductible. It’s important to understand that the higher your deductible, the lower your premium. This is because you’re taking on more of the financial responsibility of a claim or loss. As a result, your car insurance company is taking on less of a risk and can offer you a lower premium. On the flip side, if you choose a lower deductible, your premium will be higher.
When Do I Have to Pay My Deductible?
In most cases, you only have to pay your deductible when you submit a claim to your car insurance company. After you file a claim, the insurance company will investigate to determine who is at fault and how much your covered claim or loss is worth. Once they have come to a conclusion, they will then send you a check for the remaining amount minus your deductible.
Do I Have to Pay My Deductible Every Time I File a Claim?
No, you do not have to pay your deductible every time you file a claim. In fact, many insurance companies will waive your deductible if the damage is less than your deductible amount. So if you have a $500 deductible and the damage is only $400, your insurance company may cover the entire cost without you having to pay anything.
What Types of Car Insurance Have Deductibles?
All types of car insurance have deductibles, including collision, comprehensive, and liability insurance. The amount of your deductible will depend on the type of coverage you choose and the amount of coverage you purchase. Typically, your deductible will be higher for collision and comprehensive coverage and lower for liability coverage.
What Happens If I Can’t Pay My Deductible?
If you can’t pay your deductible, you may have to cover the cost of repairs or replacement yourself. However, if you can’t afford to do this, you may be able to get a loan from your insurance company. This loan will cover the cost of your deductible and you will be able to pay it back over time, typically in monthly installments.
Can I Change My Deductible?
Yes, you can change your deductible at any time. If you’d like to lower your premium, you can choose to increase your deductible. On the other hand, if you’d like to lower your out-of-pocket expenses, you can lower your deductible. Keep in mind that you can’t change your deductible mid-term, so you’ll have to wait until your policy expires or renews.
A deductible is an important part of your car insurance policy. It’s the amount of money you have to pay out-of-pocket before your insurance company will cover the remaining costs. Your deductible will depend on the type of coverage you choose and the amount of coverage you purchase. Before you buy car insurance, make sure you understand what a deductible is and how it works.