You did your homework and found a good, cheap car insurance policy. So why are your rates increasing? There are many factors that affect insurance prices, but one thing you might’ve missed is the impact of your car insurance deductible.

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.

Insurance premiums are not fixed. Your driving record and the number of claims you make affect the rate you pay. If your deductible is too low, your higher premiums might tempt you into making small claims you could’ve paid out of your pocket.

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.

Having a higher deductible could discourage you from making this mistake, according to Clark.com. The low premiums that are matched with a high deductible will also leave you with the cash to pay for minor damages so you can avoid involving your insurer.

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.