What Car Insurance Coverage Do I Need?

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Deductibles For Your Car Insurance And What They Mean

In the modern age, you should never drive without insurance, for your own personal safety, for your passengers, for those people outside of your car, and their property. If you happen to get into an accident, of your own fault, or someone else’s, then the importance of your insurance will be translated into what it covers. On your end, one of the most important things will end up being how much of a deductible you have instituted into your car insurance, to keep any accident from becoming a bankrupting event.

It’s important to learn as much as possible about auto insurance before you purchase from a specific company. Knowing the in’s and out’s of what different types of coverage exist, and what those different types of insurance cover, will be important in deciding the kind of coverage needed. Educating yourself on what auto insurance does for you, and what the capabilities of every type of coverage are, before investing your money, will be important to ensure your safety in the future.

What Is A Deductible?

Once you’ve acquired an insurance policy, and you’ve selected to have collision coverage, comprehensive coverage, or both, then you will have to choose the amount of your deductible. “What is a deductible?” You ask. A deductible is how much you, as the bearer of the insurance policy, will pay before your insurance policy covers the rest of the expenses for the damages to your vehicle. These expenses are referred to as the “out of pocket” expenses and can be quite sizable if your deductible is rather high. If you drive in a busy city with a lot of other drivers, then it’s even more worthwhile to take into account how much your deductible is, and the added risks of driving.

How Does A Deductible Work?

It’s important to have an understanding of how your insurance works, and your deductible is going to play a big part in taking care of you if you do happen to get in an accident. Learning what every part of your different insurance coverages do for you will create a greater sense of peace, and ease when you’re on the road and get into an unfortunate situation. To give you an example of how this is applied: If you have a $1,500 deductible, and you get into an accident that costs you $5000 in repairs to your car, then your “out of pocket” expenses will be $3,500.

Having a higher, or lower, deductible, will be a big determining factor in how much you pay in a monthly premium. The costs of fixing a car can be quite debilitating for any one person’s wallet, meaning that paying a bit more on your monthly premium could end up saving you many thousands of dollars in the case of an accident.

Deductible AmountAnnual Premium

Does Every Accident Involve A Deductible?

The short answer, to this very valuable question, is no. If you are the one responsible for an accident, then that will be covered by your liability insurance, which doesn’t involve a deductible. It will be in the case of an accident that, either doesn’t involve another person or that you were at fault for, that your deductible will come into play. Once your collision or comprehensive coverage is necessary, then your deductible will be an important factor in figuring out how much money you’ll pay upfront before your insurance kicks in.

Do I Pay A Deductible If I Hit A Car?

No, that kind of accident doesn’t involve your collision coverage, or your comprehensive coverage, it uses your liability insurance. Liability insurance will come into play whenever you are the cause of an accident involving another person’s property or physical well-being. It’s also important to make sure that your liability insurance is high enough to cover you in case you are at fault for any accidents. If your coverage isn’t high enough, then there may be personal lawsuits that follow afterward, and those could end up costing you much more than a slightly higher premium.

What If Another Car Hits Me?

Once an accident occurs it may take a while for the insurance companies to determine which party is actually at fault. In this case, it could be worthwhile for you to file an insurance claim, so that your vehicle can get fixed sooner than later. If this does happen, and you are later found to not be at fault for the damages after paying to repair your car, then your deductible will be reimbursed to you. If the damage to your car doesn’t really affect how your vehicle drives, and won’t grow worse by you driving it, then it may be worth it just to wait and let the other person’s insurance take care of you. Remember that any claims you make will go on your record.

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