Thursday, September 18, 2014

How to Choose an Auto Insurance Deductible

When quoting auto insurance for clients, we frequently discuss how to choose the right deductible.  We'd like to take a few minutes to share this information here on our blog, too!

A deductible is the amount you pay out of pocket when you have a claim.  For example, if you have a $500 collision deductible and have an accident, then you would pay $500 towards repairing your vehicle and insurance would cover the rest.

The deductible you choose directly relates to the amount of money you spend on premiums each month. The higher the deductible ($250, $500, $1000), the lower your monthly premium cost. 

So how do you choose?  Cheaper premiums or lower out-of-pocket expense?

First, look at your emergency savings. Do you have enough cash available to cover a higher deductible if you had to pay it if you had an accident? If the answer is no, then you’re better off paying a little more each month to avoid a big deductible.

Compare the cost savings. When your SAV-ON agent runs a quote, they can show you several different options. Ask your agent to run the premium based on several different deductibles so you can see the actual dollar cost savings. Then figure if the dollar savings is enough to offset any deductible you might face.

You can always change your mind. If you’re short on cash now, but know you could afford more out of pocket next year, you can always change your deductible at that time. Keep your deductible in a comfortable range and you’ll always be well protected! 

Call us at 888-867-2866 for more information and a personalized quote It's free!