How Do Auto Insurance Deductibles Work?

A deductible on a car insurance policy is a predetermined amount of money that you must pay before your insurer will cover a claim. Deductibles generally only apply to comprehensive and collision coverage, but they also can be found on special policies. Find out how deductibles work and get quotes from the best automobile insurance provider in your area, before selecting a policy and its deductibles.

auto1 - Cars-to-InsureComp/collision coverage apply to a number of incidents in which the vehicle is stolen or damaged by a crash, fire, vandalism and other situations.

You select your deductible when buying a policy. You may be able to modify your deductible at renewal or midterm periods of the policy, if no losses have occurred during those periods. However, some insurers allow deductibles to be adjusted at any time, so ask your insurer’s customer service department.

It’s important to understand how different deductible amounts can influence the insurance costs. They impact how much you’ll have to pay for your policy and how much you’ll have to pay to get a claim covered. The typical range of deductibles is situated between $250 and $1000. The higher amount you choose, the less you’ll pay in insurance premiums. However, higher deductibles mean you’ll need to pay more when you want to get a claim covered.

Your deductible, let’s say $1000, will be first applied to any damages. For example, if you are in an accident where your collision coverage would apply and the car you were driving suffered damage requiring $3,500 in repairs, you would be responsible for paying $1000 of those costs. The remaining $2,500 would then be covered through the collision coverage by the insurance company

When another driver is guilty for the accident you may wish to file a third party claim against their property damage coverage. Under these circumstances your insurer may pursue a process called subrogation to recoup the amounts they have already paid. The insurer may also help to recover any amount that you paid through your deductible.

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