An auto insurance deductible is the amount of money you are responsible for paying out-of-pocket towards a claim before your insurance coverage kicks in. Essentially, it is a form of cost-sharing between you and the insurance company. Deductibles can vary based on the specifics of your policy and the type of coverage (e.g., comprehensive or collision). Choosing a higher deductible typically means lower monthly premiums, whereas a lower deductible usually results in higher premiums. When you select an auto insurance policy, it’s important to balance what you can afford to pay in premiums with how much you could comfortably pay in the event of a claim. For example, if you have a $500 deductible and file a claim for damages totaling $2,000, you would pay the first $500, and your insurer would cover the remaining $1,500. It is crucial to understand your policy’s deductible to make informed decisions about your coverage and financial preparedness in case of an accident or need for repairs.
What is an auto insurance deductible?
