Buying an insurance policy means understanding the ins and outs of everything included. Understanding an insurance policy means asking questions and learning everything possible about your coverage from your Newport Beach, CA insurance agent. If you are unsure of something in the policy, including what the term deductible means in your auto insurance, do not hesitate to reach out and ask the experts at Murvay Insurance for additional information.
What Is an Auto Insurance Deductible?
When referring to your auto insurance, a deductible is the amount of money deducted from any car repairs resulting from an accident or other collision that your insurance company pays. Essentially, this is the amount you must pay out of pocket for repairs and replacement. Auto insurance deductibles are generally $500 or more, depending on the coverage options you select when buying your policy.
How Do Auto Insurance Deductibles Work?
Deductibles for auto insurance are different from deductibles used for health insurance. Each claim is treated independently with car insurance, and you must pay the deductible amount out of pocket for each claim.
Here is an example. If your deductible is $500, and you were in an accident with car repairs totaling $2000, then your out-of-pocket costs are $500, and your insurance company pays the remaining $1500 to your Newport Beach, CA repair shop. In the event the damage is not greater than the deductible amount, then you’re responsible for paying 100 percent of the costs.
How Do I Select the Right Deductible?
Figuring out how much your deductible should depend on your circumstances. It all depends on what you can afford. Selecting a higher deductible to save money on premiums only makes sense if you can afford to pay the deductible in the event of an accident. For example, if you have a $1000 deductible and get into an accident, the money you saved on your premiums no longer matters if you cannot pay it because you may have to take out a loan or use a high-interest credit card to pay your out-of-pocket costs.
Call the experts at Murvay Insurance to discuss auto insurance coverage options and which deductible is best for you.