• Car Insurance Deductibles

    There are several questions that individuals ask about their car insurance coverage or about the particulars on the policy that they have. One such question is about the deductibles on their car insurance. The deductible is an amount that the insured individual must pay from his own pocket before the insurer pays for any claim resulting in damage or loss of the vehicle. Depending on policy coverage that you have, there may be more than one deductibles. However, all policies do not come with deductibles.

    There are certain things that you must know about the deductibles that are associated with your car insurance.

    How it works

    A deductible is considered when you avail a comprehensive coverage for your car that also protects you from theft and collision. Cases that do qualify for the deductibles include situations when you avail a coverage for personal injury. Deductibles are generally used when in the incident of a car accident you find yourself guilty. The repairs of your car will be done using the deductibles. Anything more than that, which is above the market value of the car, will be covered by the insurer.

    The money involved

    Depending on the actual budget, a deductible can be lower or higher. This depends on the amount of money that you are willing to spend during repairs. Let us consider, that you have to pay Php 10,000 after your car meets with an accident. If the deductible that you have is Php 5,000 then that is the amount you pay from your pocket. The remaining Php 5,000 will be paid by the insurance company.

    When there is a higher deductible, it means the monthly premium will be lower. You may choose this option to save money. However, your typical routes and driving habits form the deciding factor here. In case, you mostly travel on roads that are congested, have heavy traffic and accident prone then going for a lower deductible can prove to be a better option.

    Bottom line

    Understanding the working of deductibles is of utmost importance. You must analyse how much you can afford and what coverage you want for the car. It can be impractical to have too many deductibles, whereas, very little coverage. On the other hand, having too many covers too can affect your finances.

    It is always wise to have a price range in mind before you take a call. Quantitative and qualitative research is always advisable.

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