First of all, you should know that a deductible is the out-of-pocket money that you will pay before the car insurance kicks in. When you reach the maximum amount of deductible stated on your policy, your insurance company will automatically take over.
The amount of your deductible vary depending on the coverage. There are coverages on your policy like the Personal Injury Protection that requires zero deductibles. You can choose to have a low deductible if you’re low on cash but it will cause your monthly rates to shoot up.
How It Works
When your car insurance coverages such as physical damage policy are written, you have several amounts of deductible options to choose from. Depending on your insurance policy, the amount can range from 0 to $3,000. Most car owners choose, $500 and $1,000 as their deductible amounts to be safe.
What will happen in the event of an accident is that whatever needs to get paid will be shouldered by the car owner first. The amount of money that you have to pay for will depend on the amount of deductible that you have on your policy. For example, if the repair shop charges you $800 dollars for parts and labor and your deductible is at $300, your insurance company will only pay $500.
On the other hand, if your vehicle was totally wrecked, the amount of your deductible will be deducted from the current value of your car. If you have a $5,000 worth of car and your deductible is at $1,000, your insurance company will give you $4,000 for your loss.
How Much Should It Be?
The amount of deductible is totally controlled by the car owner because they are the ones that decide on it. As a responsible person, you have to take a look at your financial status and how much cash you usually have in the bank.
The amount of deductible that you need to have on your policy should be the amount that you are comfortable in spending. Do not make the mistake of choosing a high deductible amount in exchange of a lower monthly premium. You don’t want to be in a situation where you have to pay for the deductible and you are short of cash.
It’s always good to talk to a trusted insurance agent to be able to understand everything about your car insurance policy—including deductibles. At Valencia Insurance, we work hard to make sure that our clients are well-protected with policies that they can afford. To learn more about how we can help you, please contact our agency at (772) 344-8899 or Click Here to request a free quote.