How do Deductibles Work?
A deductible is the amount you have to pay to the insurance company once your claim has been approved. If you are claiming for damages worth $1,000, the deductible you agree to pay will be charged to you while the insurance company covers the balance. In short, it’s the out-of-pocket charge and it has to be paid every time you file a claim and it is approved.
This makes the decision on how much deductible you want to pay a crucial part of your policy. The higher the deductible, the lower your monthly premium will be and vice versa. Consider the area you live in and how often you are on the road.
Obviously the environment could mean frequent accidents or hit and run cases just as the distance will increase chances for road incidents. If you hardly drive your car and you live in a gated community, then you can afford to choose the higher deductible and pay low monthly.
The average deductible is $500 but you can go as low as $250 or as high as $1,000.