A deductible is the set amount of money you pay for a claim you make through your insurance. When you buy your car insurance policy, you decide which deductible you’re willing to pay. The higher the deductible, the lower your premiums will be.
When choosing a deductible, you need to consider what you can afford in the event of an accident. But choosing a deductible that’s too low can also have adverse consequences.
Striking a balance with your car insurance deductible
Over time, this could lead to you losing more money than you saved in the short term. It could also lead to you being labelled as an expensive insuree within the industry–a reputation that will cost you for years to come.
The other side of the coin
While a higher deductible will keep your insurance costs down, it’s important to choose one you know you’ll be able to afford. Remember, there’s a risk in choosing a high deductible. If the unexpected happens and you need to make a large claim, you’ll need to pay that deductible right away.
Whatever rate you decide to buy, set the sum of the deductible aside in a savings account you can easily retrieve. That way, you can rest easy knowing you are prepared for any trouble that comes your way.